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Uf-  (Hi: 
UNiVtKSIIY  Of  ULINOI^S 

RESULTS 


OF 


RAILWAY  EXTENSION. 


A  PAPER  READ  BEFORE  THE  STATISTICAL  SOCIETY 

OF  LONDON,  BY  R.  DUDLEY  BAXTER,  M.  A., 

IN  NO  VE3IBER,  186Q. 


Pour  HE^mdred  and  Foi*ty  M!il- 

lions  of*  GroveMimeiit  Subsidy 

to  the  Cotton.  Railroads 

in  India. 


i 


1  RAILWAY  EXTENSION  AND  ITS  RESULTS. 

JO 

p-t*-^ 

•I. — Introduction. 

If  a  Roman  Emperor,  in  the  most  prosperous  age  of  the  empire,  had 
commanded  a  history  to  be  written  of  that  wonderful  system  of  roads 
which  consolidated  the  Roman  power,  and  carried  her  laws  and  customs 
to  the  boundaries  of  the  accessible  world,  it  would  have  afforded  a  just 
subject  for  national  pride.  The  invention  and  perfecting  of  the  art  of 
road  making,  its  sagacious  adoption  by  the  State,  its  engineering  triumphs, 
its  splendid  roads  tlirough  Italy,  through  Gaul,  through  Spain,  through 
Britain,  through  Germany,  through  Macedonia,  through  Asia  Minor, 
through  the  chief  islands  of  the  Mediterranean,  and  through  Northern 
Africa ;  all  these  would  have  been  recounted  as  proofs  of  Roman  energy 
and  magnificence,  and  as  introducing  a  new  instrument  of  civilization, 
and  creating  a  new  epoch  in  the  history  of  mankind. 

A  similar  triumph  may  fairly  be  claimed  by  Great  Britain.     The  Ro- 
mans were  the  great  road-makers  of  the  ancient  world — the  English  are 
the  great  railroad  makers  of  the  modern  world.     The   tramway  was  an 
English  invention,  the  locomotive  was  the  production  of  English  genius, 
and  the  first  railways  were  constructed  and  carried  to  success  in  England. 
We  have  covered  with  railroads  the  fairest  districts  of  the  United  King- 
dom, and  developed  railways  in  our  colonies  of  Canada  and  India.     But 
we  have  done  much  more  than  this,  we  have  introduced  them  into  almost 
every  civilized  country.     Belgian    railways   were   planned   by   George 
Stephenson.     The  great  French  system  received  an  important  impulse 
from  Locke.     In  Holland,  in  Italy,  in  Spain,  in  Portugal,  in  Norway,  in 
.    Denmark,  in  Russia,  in  Egypt,  in  Turkey,  in  Asia  Minor,  in  Algeria,  in 
c:;  the  West  Indies,  and  in  South  America,  JEuglishmen  have  led  the  way  in 
vi-,  railway  enterprise  and  construction.     To  this  day,  wherever  an  under- 
taking of  more  than  ordinary  diflSculty  presents  itself,  the  aid  is  invoked 
/-,  of  English  engineers,  English  contractors,  English  navvies,  and  English 
^   shareholders  ;  and  a  large  portion  of  the  rails  with  which  the  line  is  laid, 
and  the  engines  and  rolling  stock  with  which  it  is  worked,  are  brought 
from  England. 

To  Englishmen  the  annals  of  railways  must  always  be  of  the  highest 
interest,  and  I  trust  that  the  brief  inquiry  upon  which  I  am  about  to  en- 
ter will  not  be  deemed  a  waste  of  labor.     I  propose  to  examine  into  the 
extension  of  railways  at  home  and  abroad,  to  show  the  rate  at  which  it 
^      is  proceeding,  the  expenditure  which  it  has  cost,  and  its  vast  commercial 


results.  The  practical  questions  Avill  follow  whether  the  coustruction  of 
railways  in  the  United  Kingdom  has  reached  its  proper  limit  ?  Are  we 
over-railroaded,  as  some  assert,  so  that  railways  ought  to  be  discouraged  ? 
Or  are  we  under-railroaded,  so  that  fresh  railways  ought  to  be  invited  ? 
Are  other  nations  passing  us  in  the  race  of  railway  development  ?  And, 
lastly,  can  any  improvement  be  introduced  into  our  railway  legislation  ? 

II. — Railways  in  the  United  Kingdom. 

So  far  as  roads  are  concerned,  the  dark  ages  may  be  said  to  have  lasted 
from  the  evacuation  of  Britain  by  the  Romans  in  448  to  the  beginning 
of  the  last  century.  During  the  whole  of  that  period  nothing  could  be 
more  barbarous  or  impassable  than  English  highways.  The  Scotch  re- 
bellions first  drew  attention  to  the  necessity  of  good  roads.  The  first  step 
was  to  establish  turnpikes,  with  their  attendant  wagons  and  stage  coaches, 
superseding  the  long  strings  of  pack-horses  which,  up  to  that  time,  had 
been  the  principal  means  of  transport.  The  second  step  was  to  render 
navigable  the  rivers  which  passed  through  the  chief  seats  of  industry. 
The  third,  which  commenced  later  in  the  century,  was  to  imitate  the 
rivers  by  canals,  and  to  construct  through  the  north  and  centre  of  Eng- 
land a  net-work  of  2,600  miles  of  water  communication  at  an  outlay  of 
£50,000,000  sterling.  But  roads  and  canals  combined  were  insufficient 
for  the  trade  of  Lancashire  and  Yorkshire,  and  bitter  complaints  were 
made  of  expense  and  delay  in  the  transmission  of  their  goods. 

The  desired  improvement  came  from  the  mining  districts.  Since  the 
year  1700  it  had  been  the  custom  to  use  wooden  rails  for  the  passage  of 
the  trucks;  About  the  year  1800  Mr.  Outram,  in  Derbyshire,  laid  down 
iron  rails  upon  stone  sleepers,  and  the  roads  so  constructed  took  from  him 
the  name  of  Outram's  Ways  or  Tramways.  About  the  year  1814  the  in- 
genuity of  mining  engineers  developed  the  stationary  steam  engine  into-a 
rude  locomotive,  capable  of  drawing  heavy  loads  at  the  rate  of  four  or 
five  miles  an  hour.  It  was  proposed  to  construct  a  public  railway  on  this 
principle  between  Stockton  and  Darlington.  After  much  delay  the  line 
was  opened  by  George  Stephenson  in  1825,_and  the  experiment  was  suc- 
cessful as  a  goods  line — unsuccessful,  from  its  slowness,  as  a  passenger 
line.  The  next  experiment  was  the  Manchester  and  Liverpool  railway, 
projected  as  a  goods  line  to  accommodate  the  increasing  trade  of  those 
two  places,  which  was  crippled  by  the  high  rates  of  the  canal  and  navi- 
gation. Before  the  railway  was  completed,  another  great  improvement 
had  taken  place  in  the  construction  of  locomotives  by  the  discovery  of 
the  multitubular  boiler,  which  immensely  increased  the  volume  of  steam 
and  the  speed  attainable. 

The  opening  of  the  Manchester  and  Liverpool  railway  on  loth  Septem- 
ber, 1830,  was  the  formal  commencement  of  the  railway  era.  On  that 
day  the  public  saw  for  the  first  time  immense  trains  of  carriages,  loaded 
with  passengers,  conveyed  at  a  rate  of  more  than  fifteen  miles  an  hour,  a 
speeed  which  was  largely  exceeded  in  subsequent  trials.  The  desidera- 
tum was  at  length  obtained,  viz :  the  conveyance  of  large  masses  of  pas- 
sengers and  goods  with  ease  and  rapidity ;  and  it  was  seen  that  the  dis- 
covery must  revolutionize  the  whole  system  of  inland  communication. 

The  public  feeling  was  strangely  excited.  Commercial  men  and  men 
of  enterprise  were  enthusiastic  in  favor  of  the  new  railways,  and  eager 


for  their  introduction  all  over  the  country.  But  the  vested  interests  of 
roads  and  canals,  and  landed  proprietors  who  feared  that  their  estates 
would  be  injured,  together  with  the  great  body  of  the  public,  were  vio- 
lently prejudiced  against  them.  Railways  had  to  fight  their  way  against 
the  most  strenuous  opposition.  I  quote  from  the  "  Life  of  Robert  Ste- 
phenson," the  engineer  of  the  London  and  Birmingham  line : 

"In  everj  parish  through  which  Robert  Stc'iihenson  passed  he  was  eyed  with  suspi- 
cion by  the'iiihabitan'ts,  and  not  seldom  menaced  by  violence.  The  aristocracy  regarded 
the  irruption  as  an  interference  with  territorial  rights.  The  humbler  classes  were  not 
less  exasperated,  as  they  feared  the  railway  movement  would  injure  those  industrial  in- 
terests by  which  they  lived.  In  London,  journalists  and  pamphleteers  distributed  criti- 
cisms, which  were  nianifestly  absurd,  and  prophecies  which  time  has  signally  falsified." 
—Vol.  i.,  p.  169. 

The  city  of  Northampton  Avas  so  vehement  in  its  opposition  that  the 
line  was  diverted  to  a  distance  of  five  miles,  through  the  Kilsby  Tunnel, 
to  the  permanent  injury  both  of  the  city  and  railway.  The  bill  was 
thrown  out  in  Parliament,  and  only  passed  in  the  following  session  by  the 
most  lavish  expenditure  in  buying  off  opposition. 

Other  lines  were  soon  obtained  in  spite  of  the  same  vehement  hostility. 
The  Grand  Junction  railway  from  Liverpool  to  Birmingham  was  passed 
in  1833.  The  Eastern  Counties  railway  was  sanctioned  in  1834.  It  was 
launched  as  a  15  per  cent.  line.  It  is  said  that  a  wealthy  banker  in  the 
eastern  counties  made  a  will,  leaving  considerable  property  to  trustees  to 
be  expended  in  parliamentary  opposition  to  railways.  The  Great  West- 
ern was  thrown  out  in  1834,  but  passed  in  1835.  The  London  and  South- 
ampton, now  the  London  and  Southwestern,  was  proposed  in  1832,  but 
Avas  not  sanctioned  till  1834. 

In  1836  came  the  first  railway  mania.  Up  to  this  time  the  difficulty 
had  been  to  pass  an}''  bill  at  all ;  now  competing  schemes  began  to  be 
brought  before  Parliament.  Brighton  was  fought  for  by  no  less  than  five 
companies,  at  the  total  expenditure  of  £200,000.  The  Southeastern  ob- 
tained its  act  after  a  severe  contest  with  the  Mid  Kent  and  Central  Kent. 
Twenty-nine  bills  were  passed  by  Parliament  authorizing  the  construction 
of  994  miles  of  railway.  In  the  autumn  the  mania  raged  with  the  great- 
est violence.  "  There  is  scarcely,"  said  the  Edinburgh  Review,  "  a  prac- 
ticable line  between  two  considerable  places,  however  remote,  that  has  not 
been  occupied  by  a  company ;  frequently  two,  three,  or  four  rival  lines 
have  started  simultaneously."  The  winter  brought  a  crash,  and  the 
shares  of  the  best  companies  became  almost  unsaleable. 

In  1845  most  of  the  great  lines  had  proved  a  success.  The  London 
and  Birmingham  was  paying  10  per  cent.,  the  Grand  Junction  11  per 
cent.,  the  Stockton  and  Darlington  15  per  cent.,  and  railway  shares  were 
on  an  average  at  100  per  cent,  premium.  The  railway  mania  broke  out 
with  redoubled  violence  ;  railways  appeared  an  El  Dorado.  The  number 
of  miles  then  open  was  2,148.  The  number  of  miles  sanctioned  by  Par- 
liament in  the  three  following  sessions  was : 

1845 /    2,700 

1846 4,538 

1847 1,354 

Total 8,592 


6 

Had  all  these  lines  been  constructed,  we  should  have  had  in  1852  more 
than  10,700  miles  of  railway,  a  number  which  was  not  actually  reached 
till  1861,  or  nine  years  later.  But  the  collapse  in  1846  was  so  severe 
that  an  act  was  passed  for  the  purpose  of  facilitating  the  dissolution  of 
companies,  and  a  large  number  of  lines  were  abandoned,  amounting,  it 
is  said,  to  2,800  miles. 

Railway  extension  was  now  menaced  with  a  new  danger.  The  effect 
of  the  panic  was  so  great,  and  the  losses  on  shares  ^o  severe,  that  the 
confidence  of  the  public  was  destroyed.  Besides  this,  as  the  new  lines 
were  opened,  the  dividends  gradually  decreased  till  the  percentage  of 
profit  on  capital  had  gone  down  from  5  J  per  cent,  in  1845  to  Ss  in  1849 
and  3*  in  1850,  leaving  scarcely  anything  for  ordinary  shareholders. 
As  a  consequence,  shareholders'  lines  were  at  an  end.  But  since  1846  a 
new  custom  had  been  gaining  ground  of  the  amalgamation  of  smaller 
into  larger  companies.  I  may  instance  the  North  Eastern  Company, 
which  consists  of  twenty-five  originally  independent  railways.  In  this 
manner  eleven  powerful  companies  had  been  formed,  which  divided  the 
greater  part  of  England  between  them.  The  competition  between  these 
companies  for  the  possession  of  the  country  was  very  great,  and  by  amal- 
gamations, leases,  guarantees,  and  i^reference  stocks,  they  financed  a  large 
number  of  lines  which  otherwise  could  not  be  made.  In  this  manner  the 
construction  of  railways  between  1850  and  1858  progressed  at  the  rate  of 
nearly  400  miles  a  year. 

But  towards  the  end  of  1858  the  great  companies  had  exhausted  their 
funds  and  ardor,  and  proposed  terms  of  peace.  The  technical  phrase  was 
"that  the  companies  required  rest."  Again  it  seemed  probable  that  rail- 
way extension  would  be  checked.  But  a  new  state  of  things  arose. 
Twenty  years  of  railway  construction  had  brought  forward  many  great 
contractors,  who  made  a  business  of  financing  and  carrying  through  lines 
which  they  thought  profitable.  The  system  had  grown  up  gradually 
under  the  wing  of  the  companies,  and  it  now  came  to  the  front,  aided  by 
a  great  improvement  in  the  value  of  railway  property,  on  which  the  per- 
centage of  profits  to  capital  expended  had  gradually  risen  from  82  per 
cent,  in  1850  to  43  in  1860.  The  companies  also  found  it  their  interest 
to  make  quiet  extensions  when  required  by  the  traflic  of  the  country. 
Thus  railway  construction  was  continued  in  the  accelerated  ratio  of  more 
than  500  miles  a  year.  The  following  table  gives  a  summary  of  the  rate 
of  progress  from  1845  to  1865 : — 

UNITED  KINGDOM — MILES  CONSTRUCTED. 


} 

1845 2,440 


Average  Number. 
Year.  Miles  Opened.  Opened  per  An. 

1834  about  200 

1840  '•  1,200         .. 

I 
1850 6,500  i 

1855 8,335  | 

1860 10,434  I 

1865 13,289  | 


133 
240 
812 
367 
425 
511 


During  the  same  year  the  percentage  of  profits  to  capital  expended  were 
as  follows : — 


Per  cent.  Per  cent. 


1845  5.48 

1850  3.31 

1855  3.90 


1860  4  39 

1865  4.46 


The  latter  table,  which  is  abridged  from  an  annual  statement  in  Here- 
path's  Journal,  scarcely  gives  an  idea  of  the  gradual  manner  in  which 
the  dividends  sunk  from  their  highest  point  in  1845  to  their  lowest  in 
1850,  and  of  their  equally  gradual  recovery  from  1850  to  1860  and  18G5. 
The  main  results  of  the  two  tables  are,  first,  the  close  connection  between 
the  profit  of  one  period  and  the  average  number  of  miles  constructed  in 
the  next  five  years;  and,  second,  the  fact  that  the  construction  of  railways 
in  the  United  Kingdom  has  been  steadily  increasing  since  1855,  and  is 
now  more  than  500  miles  per  annum. 

The  number  of  miles  authorized  by  Parliament  during  the  last  six 
years  is  stated  in  the  Railway  Times  to  be  as  follows : — 

Year.  Miles.     Year.  Miles. 

1861  1,332     1864 1,329 

1862  809     1865  1,996 

1863    795     1866  1,062 


7,323 
Average 1,220 

Hence  the  miles  authorized  by  Parliament  for  the  last  six  years  have 
been  double  the  number  constructed;  and  there  must  be  about  3,500 
miles  not  begun  or  not  completed — a  number  sufficient  to  occupy  us  for 
fully  seven  years,  at  our  present  rate  of  construction. 

Such  is  a  brief  summary  of  the  history  of 'railway  extension  in  Great 
Britain  and  Ireland.     It  may  be  thrown  into  five  periods : 

1.  The  period  of  experiment,  from  1820  to  1830. 

2.  The  period  of  infancy,  from  1830  to  1845. 

3.  The  period  of  mania,  from  1845  to  1848. 

4.  The  period  of  competition  by  great  companies,  from  1848  to  1859. 

5.  The  period  of  contractors'  lines  and  companies'  extensions,  from 
1859  to  1865. 

III. — Distribution  of  Railways  in  the  United  Kingdom. 

The  returns  of  the  Board  of  Trade  to  the  end  of  1865  give  the  follow- 
ing distribution  of  the  13,289  miles  then  open: — 

Total 
Double  Lines.     Single  Lines.  Miles  Open. 

England  and  Wales 6,081  3,170  9,251 

Scotland 946  1,254  2,200 

Ireland 476  1,362  1,838 

7,503  5,786  13.289 

Hence  there  is  a  considerable  preponderance  of  double  lines  over  single 
lines  in  England,  and  of  single  lines  over  double  in  Scotland  and  Ireland. 

The  following  table  shows  which  country  has  the  greatest  length  of 
railways  in  proportion  to  its  area : — 


Square  Miles. 

Railway  Mileage. 

per  Mile  of  Railway 

9,251 

6.25 

2,200 

14. 

1,838 

17.7 

Area  in 
Square  Miles. 

England  and  Wales 57,812 

Scotland 30,715 

Ireland 32,512 

So  that  England  and  Wales  have  a  mile  of  railway  for  every  six  and  a 
half  square  miles  of  country,  being  the  highest  proportion  in  the  world, 
while  Scotland  has  less  than  Imlf  that  accommodation,  and  Ireland  little 
more  than  one-third. 

The  following  table  shows  which  country  has  the  greatest  length  of 
railway  in  proportion  to  population  : — 

Population  per 
Population  in  1860.     Railway  Mileage.     Mile  of  Railway. 

England  and  Wales 20,228,497  9,251  2,186 

Scotland 3,096,308  2,200  1,409 

Ireland 5,850,309  1,838  3,182 

So  that  Scotland,  a  thinly  inhabited  country,  has  the  greatest  railway 
mileage  in  proportion  to  her  population,  and  we  shall  afterwards  find  that 
she  stands  at  the  head  of  all  European  countries  in  this  respect. 

The  manner  in  which  this  railway  mileage  is  distributed  through  Eng- 
land deserves  some  attention.  A  railway  map  will  show  that  the  general 
direction  of  English  lines  is  towards  the  meti'opolis.  London  is  a  centre 
to  which  nearly  all  the  main  lines  converge.  Every  large  town  is,  in  its 
degree,  a  centre  of  railway  convergence.  For  example,  look  at  the  lines 
radiating  from  Leeds,  from  Hull,  from  Birmingham,  or  from  Bristol. 
But  all  those  lesser  stars  revolve,  so  to  speak,  round  the  metropolis  as  a 
central  sun. 

A  great  deal  may  be  learned  of  the  character  and  political  state  of  a 
country  from  the  convergence  of  its  railway  lines.  Centralizing  France 
concentrates  them  all  on  Paris.  Spain,  another  nation  of  the  Latin  race, 
directs  her  railways  on  Madrid.  Italy  shows  her  past  deficiency  of  unity, 
and  want  of  a  capital,  by  her  straggling  and  centerless  railroads.  Bel- 
gium is  evidently  a  collection  of  co-equal  cities  without  any  prepondera- 
ting focus.  Germany  betrays  her  territorial  divisions  by  the  multitude 
of  her  railway  centres.  Austria,  on  the  contrary,  shows  her  unity  by  the 
convergence  of  her  lines  on  Vienna.  The  United  States  of  America 
prove  their  federal  independence  by  the  number  of  their  centres  of 
radiation. 

The  national  character  of  the  English  nation  may  be  traced  in  the  same 
way.  Though  our  raihvays  point  towards  London,  they  have  also  another 
point  of  convergence — towards  Manchester  and  the  great  port  of  Liver- 
pool. The  London  and  Northwestern,  the  Great  Northern  (by  the 
Manchester,  Shefiield  and  Lincolnshire  line),  the  Great  Western  and  the 
Midland  run  to  Manchester  and  Liverpool  from  the  south.  The  Man- 
chester, Shefiield  and  Lincolshire  railway,  the  London  and  Northwest- 
ern Yorkshire  and  Carlisle  lines,  and  the  network  of  the  Lancashire  and 
Yorkshire  Company  converge  on  them  from  the  east  and  north.  The 
London  and  Northwestern  Welsh  railways  and  the  Mid  Wales  and 
South  Wales  lines  communicate  with  them  from  the  west.  Thus  our  rail- 
way system  shows  that  Manchester  and  Liverpool  are  the  manufacturing 
and  commercial  capitals  of  the  country,  as  Loudon  is  its  monetary  and 


9 

political  metropolis,  and  that  the  French  centralization  into  a  single  great 
city  does  not  exist  in  England. 

It  remains  to  describe  the  great  systems  into  which  the  English  rail- 
ways have  been  amalgamated.  There  are  in  England  twelve  great  com- 
panies, with  more  than  £14,000,000  each  of  capital,  which  in  the  aggre- 
gate comprises  nearly  seven-eighths  of  our  total  mileage  and  capital. 
They  divide  the  country  into  twelve  railway  kingdoms,  genei'ally  well 
defined,  but  sometimes  intermingled  in  the-most  intricate  manner.  They 
may  be  classified  into  the  following  seven  districts : — 

Miles  Open.     Capital  Expended. 

1.  Northwestern    District — London     and     Northwestern 

Railway 1,306  £53,210,000 

2.  Midland  District — Midland  Railway 677  26,103,000 

3.  Northeastern  District — Great  Northern  Railway 422  18,200,000 

Northeastern  Railway 1,121  41,158,000 

4.  Mersey  to  Humber  District — Lancashire  and  Yorkshire 

Railway 403  21,114,000 

Manchester,  SheiEeld  and  Lincolnshire  Railway 246  14,113,000 

5.  Eastern  District — Great  Eastern  Railway \ 709  23,574,000 

6.  Southeastern  District — Southeastern  Railway 319  18,626,000 

London,  Chatham  and  Dover  Railway 175  14,768,000 

London  and  Brighton  Railway 294  14,561,000 

7.  Southwestern    District — London     and    Southwestern 

Railway 500  16,364,000 

Great  Western  Railway 1,292  47,630,000 

Total 7,564  £309,421,000 

In  Scotland  there  aY'e  three  great  companies : — 

Miles  Open.  Capital  Expended. 

1.  Southeast  Coast — North  British  Railway 732  £17,802,000 

2.  Central  District — Caledonian  Railway 561  14,797,000 

3.  Southivest  Coast — Glasgow  and  Southwestern 249  5,603,000 

Total 1,542  £38,202,000 

which  include  three-fourths  of  the  whole  mileage  and  capital  of  Scotch 
railways. 

In  Ireland  there  are  only  two  large  companies : — 

Miles  Open.     Capital  Expended. 

1.  Southwestern  District — Great  Southern  and  Western 420  £5,712,000 

2.  ifirfZanc^  Z>is<Wrt— Midland  Great  Western 260  3,625,000 

Total  680  £9,337,000 

which  embrace  rather  more  than  two-fifths  of  the  capital  and  mileage. 

The  above  figures  are  taken  from  Serepath's  Rcdhvay  Journal,  made 
up  very  nearly  to  the  present  time. 

The  following  table  shows  the  average  gross  receijjts  and  net  })rofits, 
for  three  years,  for  the  United  Kingdom,  and  also  the  dividends  paid  on 
ordinary  stock  in  the  above  great  companies,  except  the  London,  Chatham 
and  Dover: — 

AVERAGE  RECEIPTS  AND  DIVIDENDS  PER  CENT. 

1857.  1861.  1865. 

Gross  receipts 7.87  8.27  8.57 

Net  protits 4.19  4.30  4.46 


861. 

1865. 

4.45 

4.65 

4.90 

5.70 

5.00 

3.56 

10 

Dividends  of  Great  Companies  :  1857. 

12  English 4.00 

3  Scotch 4.55 

2  Irish 5.00 

A verage  dividends 4.51  4.78  4.64 

IV. — Cost  of  Railways  in  the  United  Kingdom. 

The  total  capital  authorized  and  expended,  up  to  the  end  of  1865,  is 
given  in  the  Board  of  Trade  Returns,  as  follows,  including  the  companies 
estimated  for,  which  have  not  made  a  return : — 

*  CAPITAL  AUTHOKIZED. 

Shares  £434,457,000 

Loans 143.968,000 

Total £578,425,000 

CAPITAL  EXPENDED. 

Debenture  Capital  : 

Stock £13,312,000 

Mortgages 98,059,000—111,871,000 

Preference  capital 124,517,000 

Ordinary  capital 220,033,000 

V  £456,421,000 

Hence  the  following  conclusions : — 
1.    The  capital  expended  is  more  than  half  as  large  as  the  national  debt. 

2.  The  debenture  and  preference  capital,  which  are  practically  first 
and  second  mortgages  of  railway  property,  amounted  in  1865  to  more 
than  half  the  whole  capital  expended. 

So  that  railway  property  is  virtually  mortgaged  to  the  debenture  and 
preference  capitalist  for  about  half  its  value. 

The  preference  capital  has  for  some  years  been  steadily  increasing, 
while  the  ordinary  capital  has  remained  almost  stationary.  During  1865 
the  preference  capital  increased  by  £19,615,000,  while  the  ordinary 
capital  only  increased  by  £4,650,000.  As  the  old  companies  almost 
always  increase  their  capital  by  preference  stock,  I  anticipate  that  in 
seven  or  eight  years  the  debenture  and  preference  capital  will  have  risen 
to  two-thirds  of  the  capital  expended. 

3.  The  unissued  or  unpaid  capital  was,  in  1864,  £95,000,000.  This 
increased  largely  in  1865,  by  the  great  number  of  miles  authorized  in 
that  year,  and  in  the  return  for  that  year  is  £122,000,000. 

The  expenditure  was,  in  1864,  divided  between  the  three  kingdoms  in 
the  following  proportions,  including  non-returning  companies : — 

Cost  per 
Capital  Expended.     Mile  of  Railway. 

England  and  Wales  £379,000,000  £41,033 

Scotland 50,206,000  22,820 

Ireland 26,394,000  14,360 

Thus  Ireland  has  made  her  railways  for  one-third  the  cost,  and  Scot- 
land for  little  more  than  half  the  cost  of  the  English  railways — a  result 
which  might  be  partly  expected  from  their  larger  poportions  of  single 
lines,  the  greater  cheapness  of  land,  and  in  Ireland  the  lower  wages  of 
labor. 


11 

But  the  English  expenditure  is  the  highest  in  the  world,  and  has  given 
rise  to  severe  remarks  on  the  wastefulness  of  the  English  system.  Let 
us  examine  the  causes  of  expense. 

1.  The  English  expenditure  includes,  on  a  probable  estimate,  no  less 
than  £40,000,000  sterling  absorbed  by  metropolitan  railways  and  termini. 
This  of  itself  is  £4,500  per  mile  on  the  8,890  miles  constructed.  _ 

It  also  includes  very  large  sums  for  termini  in  Manchester,  Liverpool, 
Leeds,  Sheffield,  Birmingham  and  other  great  towns,  far  beyond  what  is 
paid  in  continental  cities. 

2.  The  English  expenditure  also  includes  considerable  capital  for  docks, 
as  at  Grimsby,  where  £1,000,000  was  laid  out  by  the  Manchester,  Shef- 
field and  Lincolnshire  Company;  and  at  Hartlepool,  where  £1,250,000 
was  spent  by  a  company  now  merged  in  the  Northeastern. 

It  also  includes  in  many  instances  capital  expended  on  steamers  and 
capital  for  the  purchase  of  canals. 

3.  The  counties  whose  trade  and  population  is  greatest,  and  which  are 
most  thickly  studded  with  railways,  as  Lancashire,  Yorkshire,  and  Gla- 
morgan, are  exceedingly  hilly,  and  necessitate  heavy  embankments,  cut- 
tings and  tunnels,  which  enormously  increase  the  cost  of  construction. 
The  Lancashire  and  Yorkshire  Railway  has  cost  £52,400  per  mile  for 
the  whole  of  its  403  miles.  Had  those  counties  been  as  flat  as  Belgium 
the  company  might  probably  have  saved  something  like  £20,000  per  mile, 
or  £8,000,000  sterling.  The  Manchester,  Sheffield  and  Lincolnshire 
Company,  even  after  deducting  £1,000,000  for  the  docks  of  Grimsby, 
have  spent  £53,000  per  mile.  A  flat  country  might  have  saved  them  a 
similar  sum  per  mile,  or  £5,000,000  sterling. 

4.  England,  as  the  inventor  of  railways,  had  to  buy  experience  in 
their  construction.  Other  nations  have  profited  by  it.  There  is  no  doubt 
that  our  present  system  of  lines  could  now  be  made  at  very  much  less 
than  their  original  cost.  In  addition  we  have  paid  for  experiments,  such 
as  the  broad  guage  and  atmosphei'ic  railway. 

5.  The  great  preponderance  of  double  lines  over  single  (6,081  miles 
against  3,170)  has  largely  increased  the  expense  as  compared  with  the 
single  lines,  which  predominate  in  other  countries. 

6.  The  price  of  land  in  a  thickly  populated  country  like  England  must 
necessai'ily  be  higher  than  in  the  more  thinly  inhabited  continental  coun- 
tries. But  beyond  this,  English  landowners,  in  the  first  vehement  oppo- 
sition to  railways,  acquired  the  habit  of  being  bought  ofi*  at  high  prices, 
and  of  exacting  immense  sums  for  imaginary  damages.  The  first 
Eastern  Counties  line  was  said  to  have  paid  £12,000  per  mile  for  land 
through  an  agricultural  country,  being  about  ten  times  its  real  value. 
This  habit  of  exaction  has  been  perpetuated  to  our  own  day.  As  an 
every  day  instance  I  may  mention  that,  only  a  few  months  ago  a  gentle- 
man of  great  wealth  was  selling  to  a  railway  company,  which  he  had 
supported  in  Parliament,  thirty  acres  of  grass  land,  of  which  the  admitted 
agricultural  value  was  £100  an  acre,  and  three  acres  of  limestone,  of 
which  the  proved  value  to  a  quarryman  was  £300  an  acre.  There  was 
no  residential  damage,  and  the  railway  skirted  the  outside  of  the  estate. 
The  price  of  the  whole  in  an  auction  room  would  have  been  about 
£4,000.  The  proprietor's  agent,  supported  by  a  troop  of  eminent  valuers, 
demanded  £25,000. 


VI 

7.  Parliamentary  expenses  are  an  item  of  English  expenditure  not  oc- 
curring  in  countries  where  the  concession  of  railways  is  the  province  of  a 
department  of  the  government.  But  in  those  countries  there  is  almost 
always  a  "promoter's  fund"  and  secret  service  fund,  which  often  attain 
very  large  dimensions.  Which  is  the  preferable  alternative?  Besides, 
those  who  object  to  parliamentary  committees  must  be  prepared  to  give 
us  a  practicable  substitute,  which  will  suit  the  habits  and  feelings  of  the 
British  nation.  Now,  a  free  nation  must  have  liberty  to  bring  forward 
schemes  for  the  public  accommodation,  and  to  have  them  decided  by  some 
public  tribunal,  after  full  investigation  and  hearing  all  parties.  There 
must  be  witnesses,  and,  where  millions  of  money  are  at  stake,  there  must 
be  the  powder  of  be^ng  represented  by  the  ablest  advocates.  Commissions 
appointed  by  the  Board  of  Trade,  or  any  other  department,  would  be 
just  as  expensive.  The  expense  of  parliamentary  committees  is  the  price 
we  pay  for  free  trade  in  railways,  and  for  our  present  amount  of  railway 
development. 

I  believe  that  these  causes  will  fully  account  for  the  higher  cost  of 
English  railways,  and,  except  as  regards  the  cost  of  land,  I  think  that  no 
valid  or  practical  objection  can  be  taken  to  them.  There  is  certainly  the 
consolation  of  knowing  that  in  return  for  our  money  we  have  a  more 
efficient  system  of  railways  than  any  other  country. 

V. — Traffic  and  Benefit  of  Railw^ays  in  the  United  Kingdom. 

In  order  to  appreciate  the  wonderful  increase  of  traffic  which  has  re- 
sulted from  railways,  it  is  necessary  to  know  the  traffic  of  the  kingdom 
before  their  introduction. 

Previous  to  the  opening  of  the  great  trunk  lines  in  1835,  passengers 
were  conveyed  by  mail  and  stage  coaches,  a  system  which  had  reached  a 
high  degree  of  perfection.  Mr,  Porter,  in  his  "  Progress  of  the  Nation," 
has  calculated,  from  the  stage  coach  license  returns,  the  total  number  of 
miles  traveled  by  passengers  during  1834  as  358,290,000,  which  repi-e- 
sented  30,000,000  persons  traveling  12  miles  each.  The  fares  were  very 
high,  being  by  the  mails  6d.  a  mile  inside  and  4d.  outside,  exclusive  of 
coachmen  and  guards,  and  rather  less  on  the  stage  coaches.  Including 
coachmen  and  guards,  the  average  fares  paid  may  be  taken  at  5d.  per 
mile.     Hence  the  30,000,000  passengers  paid  a  total  of  £6,250,000. 

Goods  were  conveyed  by  water  or  by  road. 

Water  communication  had  been  developed  with  great  perseverance, 
and  was  nearly  as  follows: — 

Miles. 

Canals — England 2,600 

Scotland 225 

Ireland 275—3,100 

NaTigations 900 

Total 4,000 

Being  one  mile  to  every  thirty  square  miles  of  country. 

Canal  companies  always  regarded  with  great  jealousy  any  attempt  to 
ascertain  the  amount  of  their  traffic,  and  the  only  calculation  I  can  find 
is  in  Smiles'  "Life  of  Brindley,"  (p.  464,)  where  it  is  estimated  at 
20,000,000  tons  annually.  The  rates  charged  by  canal  carriers  were,  for 
the  great  bulk  of  general  goods,  about  4d.  per  ton  per  mile.     Thus,  Lon- 


don  to  Birmingham  was  40s.  per  ton,  and  Loudon  to  Manchester  70s.  to 
80s.,  the  direct  distances  being  113  and  200  miles.  The  rates  for  coal 
were  considerably  less,  but  so  high  as  to  restrict  its  carriage  to  short  dis- 
tances, and  to  reuder  its  amount  inconsiderable. 

The  tonnage  carried  by  road  appears  to  have  been  about  one-sixth  of 
that  conveyed  by  canal,  and  may  be  taken  at  3,000,000  tons.  The  rates 
by  road  were  about  13d.  per  ton  per  mile,  the  stage  wagons  from  London 
to  Birmingham  charging  no  less  than  £6  per  ton  for  the  113  miles,  and 
those  from  London  to  Leeds  the  enormous  amount  of  £13  per  ton  for 
190  miles.  Assuming  that  each  ton  by  road  or  water  was  carried  20 
miles — a  less  average  than  at  present — the  total  rates  paid  would  have 
been  nearly  £8,000,000.  Hence  the  total  traffic  receipts  about  the  year 
1834  may  be  calculated  as  follows : — 

Passengers 30,000,000  =  £6,250,000 

Goods tons  23,000,000  =     8,000,000 

£14,250,000 

The  effect  of  railways  was  very  remarkable.  It  might  reasonably  be 
supposed  that  the  new  means  of  communication  would  have  supplanted 
and  destroyed  the  old.  kSingular  to  relate,  no  diminution  has  taken 
place  either  in  the  road  or  canal  traffic.  As  fast  as  coaches  were  run  off 
the  main  roads  they  were  put  on  the  side  roads,  or  re-appeared  in  the 
shape  of  omnibuses.  At  the  present  moment  there  is  probably  a  larger 
mileage  of  road  passenger  traffic  than  in  1834.  The  railway  traffic  is  new 
and  additional  traffic.  But  railways  reduced  the  fares  very  materially. 
For  instance,  the  journey  from  Doncaster  to  London  by  mail  used  to  cost 
£5  inside  and  £3  outside,  (exclusive  of  food,)  for  156  miles,  performed 
.  in  twenty  hours.  The  railway  fares  are  now  27s.  6d.  first  class,  and  21s. 
second  class  for  the  same  distance,  performed  in  four  hours.  The  average 
fares  now  paid  by  first,  second,  and  third  class  passengers  are  IM.  per 
mile,  against  an  average  of  5d.  in  the  coaching  days,  being  little  more 
than  one-fourth  of  the  former  amounts. 

On  canals  the  effect  of  railway  competition  was  also  to  lower  the  rates 
to  one-fourth  of  the  former  charges.  In  consequence  the  canal  tonnage 
actually  hicreased,  and  is  now  considerably  larger  than  it  was  before  the 
competition  of  railways.  Hence  the  railway  goods  traffic,  like  its  passen- 
ger traffic,  is  entirely  a  new  traffic.  The  saving  in  cost  is  also  very  great  ; 
goods  are  carried  by  rail  at  an  average  of  li^d.  per  ton,  or  40  per  cent,  of 
the  old  canal  rates.  * 

Now  observe  the  growth  of  this  new  railway  traffic.  The  following 
table  from  the  Parliamentery  returns  (except  for  1865)  shows  the  receipts 
from  passenger  and  goods  traffic  on  railways  in  the  following  years : — 


INCREASE    OF    TRAFFIC. 


Total    Receipts.      Average   An-         Average  of  whole 
'  nual  Increase.  22  years. 


'^'^ £4,535,000|  £i^o,,o_o,,^ 

1848 9,933,000  { 

}  1,653,000 

1855 21,507,000^ 

}  1,252,000 

1860 27,'766,000^ 

1865 35,890,000/  1,619,000 


£1,423,000  ' 


14 

Thus  the  average  annual  increase  for  the  whole  twenty-two  years  was 
£1,423,000  per  annum  ;  and  the  increase  was  largest  in  the  latest  years. 
The  traffic  in  1864  and  1865  was  thus  made  up  : — 

1864.  1865. 

Passengers £15,684,000  £16,572,000 

Goods 18,331,000  19,318,000 


Total  receipts £34,015,000  £35,890.000 

And  the  things  carried  were,  exclusive  of  carriages  and  animals, — 

1864  1865. 

Passengers 229,272,000  251,863,000 

Goods,  tons 110,400,000  114,593,000 

Being  six  times  as  many  as  before  the  introduction  of  railways. 
The  increase  was  extraordinary. 

1864  over  1863.  1865  over  1864. 

Increase  in  passenger  receipts £1,163,000  £888,000 

"  goods  "       1,696,000  986,000 


£2,859,000        •  £1, 874,000 

So  that  the  increase  in  1864  was  just  double  the  average  annual  increase. 

The  increase  in  things  carried  was  : 

1864  over  1863.  1865  over  1864. 

■   Increase  in  number  of  passengers....        24,637,000  22,590,000 

"  tons  of  goods 9,800,000  4,233,000 

An  increase  in  1864  equal  to  five-sixths  of  the  whole  number  of  passen- 
gers in  1834,  and  to  five-twelfths  of  the  total  goods  tonnage  in  1834  ;  a 
wonderful  proof  of  the  capabilities  and  benefits  of  the  railway  system. 

Now  let  us  examine  the  saving  to  the  country.  Had  the  railway  traf- 
fic of  1865  been  conveyed  by  canal  and  road  at  the  pre-railway  rates,  it 
would  have  cost  thi-ee  times  as  much.  Instead  of  £36,000,000  it  would 
have  cost  £108,000,000.  Hence  there  is  a  saving  of  £72,000,000  a  year, 
or  more  than  the  whole  taxation  of  the  United  Kingdom. 

But  the  real  benefit  is  far  beyond  even  this  vast  saving.  If  the  traffic 
had  been  already  in  existence  it  would  have  been  cheapened  to  this  ex- 
tent. But  it  was  not  previously  in  existence;  it  was  a  new  traffic,  created 
by  raihvays,  and  impossible  without  railways.  To  create  such  a  traffic, 
or  to  furnish  the  machinery  by  which  alone  it  could  exist,  is  a  far  higher 
merit  than  to  cheapen  an  existing  traffic,  and  has  had  far  greater  influ- 
ence on  the  prosperity  of  the  nation. 

Look  at  the  effects  on  commerce.  Before  1833  the  exports  and  im- 
ports were  almost  stationary.  Since  that  time  they  have  increased  as  fol- 
lows : — 

INCREASE    OF  EXPORTS  AND  IMPORTS. 

One  Year  '^°^^^  Exports 

and  Imports 
1833 £85,500,000 

1842 116,000,000 

1850 171,000,000 

1855 260,000,000 

1860 375,000,000 

1865 490,000,000 


Per  cent. 
Increase. 

Per  cent,  per 
annum  Increase 

36 

4 

47 

6 

:52 

10.4 

44 

9 

30 

« 

15 

I  am  far  from  attributing  the  whole  of  this  increase  to  railways.  Free 
trade,  steamboats,  the  improvements  in  machinery,  and  other  causes  con- 
tributed powerfully  to  accelerate  its  progress.  But  I  wish  to  call  atten- 
tion to  two  facts. 

1.  This  increase  could  not  have  taken  place  without  railways.  It  would 
have  been  physically  impossible  to  convey  the  quantity  of  goods,  still  less 
to  do  so  with  the  necessary  rapidity. 

Mr  Francis,  in  his  "  History  of  Railways,"  draws  a  striking  picture 
of  the  obstacles  to  commerce  in  1824,  from  the  want  of  means  of  con- 
veyance : 

"Although  the  wealth  and  importance  of  Manchester  and  Liverpool  had  immensely 
increased,  there  was  no  increase  in  the  carriage  power  between  the  two  places.  The 
canal  companies  enjoyed  a  virtual  monopoly.  Their  agents  were  despotic  in  their  treat- 
ment of  the  great  houses  which  supported  them.  The  charges,  though  high,  were  sub- 
mitted to,  but  the  time  lost  was  unbearable.  Although  the  facilities  of  transit  were 
manifestly  deficient,  although  the  barges  got  aground,  although  for  ten  days  during 
summer  the  canals  were  stopped  by  draught,  and  in  severe  winters  frozen  up  for  weeks, 
yet  the  agents  established  a  rotation  by  which  they  sent  as  much  or  as  little  as  suited 
them,  and  shipped  it  how  or  when  they  pleased.  They  held  levees  attended  by  crowd?, 
who  almost  implored  them  to  forward  their  goods.  The  effects  were  disastrous  ;  mills 
stood  still  for  want  of  material  ;  machines  were  stopped  for  lack  of  food.  Another  fea- 
ture was  the  extreme  slowness  of  communication.  The  average  time  of  one  company 
between  Liverpool  and  Manchester  was  four  days,  and  of  another  thirty-six  hours ;  and 
the  goods,  although  conveyed  across  the  Atlantic  in  twenty-one  days,  were  often  kept 
six  weeks  in  the  docks  and  warehouses  of  Liverpool  before  they  could  be  conveyed  to 
Manchester.  '  I  took  so  much  for  you  yesterday,  and  I  can  only  take  so  much  to-day,' 
was  the  reply  when  an  urgent  demand  was  made.  The  exchange  of  Liverpool  resounded 
with  merchants'  complaints  ;  the  counting-houses  of  Manchester  re-echoed  the  murmurs 
of  manufacturers." — Vol.  i.,  p.  '77  and  "78. 

This  intolerable  tyranny  produced  the  Manchester  and  Liverpool  rail- 
way, and  gave  the  greatest  impetus  to  railway  development. 

2.  The  increase  of  imports  and  exports  vms  in  strict  proportion  to  the 
development  of  railways.  The  following  table  shows  the  miles  of  railway 
and  navigation  opened,  and  the  total  exports  and  imports.  It  must  be 
remembered  that  there  are  about  4,000  miles  of  navigation,  and  that  the 
exports  and  imports  had  been  for  some  time  stationary  before  1833  : — 

PROPORTION   OF    EXPORTS   AND    IMPORTS  TO   RAILWAYS   AND   NAVIGATION. 

Miles  of  Total  exports  Exports 

railway  and  and  and  imp'ts 

Year.  navigation.  imports.  per  mile. 

1833 4,000  £85,500,000  £21,3t5 

1840 5,200  119,000,000  22,884 

1845 6,441  135,000,000  20,959 

1850 10,733  171,800,000  16,006 

1855 12,334  260,234,000  21,098 

1860 14,433  375,052,000  52,985 

1865 17,289  490,000,000  28,341 

Here  the  increase  in  exports  and  imports  keeps  pace  with  railway  de- 
velopment from  1833  to  1845,  falls  below  it  during  the  enormous  multi- 
plication of  railways  and  the  railway  distress  from  1845  to  1850,  rises 
again  to  the  former  level  in  1855,  and  outstrips  it  after  that  year,  aided 
by  the  lowering  of  fares  and  the  greater  facilities  for  through  booking 
and  interchange  of  traffic.  I  cannot  think  that  this  correspondence  within 
the  two  increases  is  accidental,  especially  as  I  shall  show  that  it  exists 
also  in  France. 


16 

But,  it  may  be  said,  how  do  exports  and  imports  depend  on  the  devel- 
opment of  the  railway  system  ?  I  answer,  because  they  depend  on  the 
goods  traffic  ;  and  the  goods  traffic  increases  visibly  with  the  increase  of 
railway  mileage  and  the  perfecting  of  raihvay  facilities.  Goods  traffic 
means  raw  material  and  food  brought  from  ports,  or  mines,  or  farms,  to 
the  producing  population,  and  manufactured  articles  carried  back  from 
the  producers  to  the  inland  or  foreign  consumers.  The  exports  and  im- 
ports bear  a  variable  but  appreciable  proportion  to  the  inland  traffic. 
Every  mineral  railway  clearly  increases  them  ;  every  agricultural  railway 
increases  them  less  clearly  but  not  less  certainly.  Hence  I  claim  it  as  an 
axiom,  that  the  commerce  of  a  country  increases  in  direct  proportion  to 
the  improvement  of  its  railway  system,  and  that  railway  development  is  one 
of  the  most  powerful  and  evident  causes  of  the  increase  of  commerce. 

Now,  let  us  turn  to  the  benefits  which  railways  have  conferred  on  the 
working  classes.  For  many  years  before  1830  great  distress  had  prevailed 
through  the  country.  Mr.  Molesworth,  in  his  "  History  of  the  Reform 
Bill,"  says  that  it  existed  in  every  class  of  the  community.  "  Agricul- 
tural laborers  were  found  starved  to  death.  In  vain  did  landlords  abate 
their  rents  and  clergymen  their  tithes ;  wages  continued  to  fall  till  they 
did  not  suffice  to  support  existence."  Innumerable  petitions  were  pre- 
sented from  every  county  in  England,  stating  that  the  distress  "  was 
weighing  down  the  landholder  and  the  manufacturer,  the  shipowner  and 
the  miner,  the  employer  and  the  laborer."  Trade  and  commerce  were 
standing  still  while  poj)ulation  was  rapidly  increasing  at  nearly  the  same 
rate  as  during  the  most  busy  and  prosperous  period  of  the  French  war. 
The  increase  from  1801  to  1861  is  given  in  the  census : — 

ENGLAND   AND    WALES. 


Popula-  Inc.  per  ct. 

Year.  tion.  for  10  years. 

1801 8,892,536  11 

1811 10,164,256  14 

1821 12,000,236  18 

1831 13,896,T97  16 


Popula-  Inc.  per  ct. 

Year.  tion.  forlOvears. 

1841 15.914,148  14  ' 

1851 l'(,927,609  13 

1861 20,066,224  12 


The  increase  during  the  ten  years  from  1821  to  1831,  which  included 
so  much  disti'ess,  was  no  less  than  16  per  cent.,  distributed  pretty  uni- 
formly between  the  agricultural  and  manufacturing  counties,  and  in  itself 
almost  a  sufficient  cause  for  the  distress.  But  what  has  happened  since  ? 
Increased  facilities  of  transit  led  to  increased  trade  ;  increased  trade 
gave  greater  employment  and  improved  wages  ;  the  diminution  in  the 
cost  of  transit  and  the  repeal  of  fiscal  duties  cheapened  provisions ;  and 
the  immense  flood  of  commerce  which  set  in  since  1850  has  raised  the  in- 
comes and  the  prosperity  of  the  working  classes  to  an  unprecedented  height. 
Railways  were  the  first  cause  of  this  great  change,  and  are  entitled  to 
share  largely  with  free  trade  the  glory  of  its  subsequent  increase  and  of 
the  national  benefit.  But  one  portion  of  the  result  is  entirely  their  own. 
Free  trade  benefited  the  manufacturing  populations,  but  had  little  to  do 
with  the  agriculturists.  Yet  the  distress  in  the  rural  districts  was  as  great 
or  greater,  than  in  the  towns,  and  this  under  a  system  of  the  most  rigid 
protection.  How  did  the  country  population  attain  their  present  pros- 
perity ?  kSimply  by  the  emigration  to  the  towns  or  colonies  of  the  redun^ 
dant  laborers.     This  emigration  was  scarcely  possible  till  the  construction 


17 

of  railways.  Up  to  that  time  the  farm  laborer  was  unable  to  migrate  ; 
from  that  time  he  became  a  migratory  animal.  The  increase  of  popula- 
tion in  agricultural  counties  stopped,  or  was  changed  into  a  decrease,  and 
the  laborers  ceased  to  be  too  numerous  for  the  work.  To  this  cause  is 
principally  owing  the  sufficiency  of  employment  and  wages  throughout 
the  agricultural  portion  of  the  kingdom.  If  I  may  venture  on  a  com- 
parison, England  was,  in  1830,  like  a  wide-spreading  plain  flooded  with 
stagnant  waters,  which  were  the  cause  of  malaria  and  distress.  Railways 
were  a  grand  system  of  di'ainage,  carrying  away  to  the  running  streams, 
or  to  the  ocean,  the  redundant  moisture,  and  restoring  the  country  to  fer- 
tility and  prosperty. 

VI. — Railways  in  France. 

In  turning  from  England  to  France  we  enter  a  country  completely  dif- 
ferent in  its  railway  organization.  In  England  everything  is  left  to  indi- 
vidual enterprise  and  independent  companies.  In  France  nothing  can  be 
done  without  the  aid  of  the  government.  They  tried  the  English  sys- 
tem, and  failed,  just  as  they  tried  parliamentary  government  and  failed. 
The  independent  railway  companies  broke  down,  and  it  was  found  abso- 
lutely necessary  to  change  to  a  regime  of  government  guarantees  and  gov- 
ernment surveillance,  suited  to  the  genius  of  the  French  people,  and  under 
which  they  regained  confidence  and  prosperity. 

Before  the  introduction  of  railways  France  possessed  an  extensive  sys- 
tem of  water  communication,  which  is  now  of  the  following  extent : — 

Miles. 

Navigable  rivers 4,820 

Canals 2,880 

Total 7,700 

by  which  goods  were  conveyed  at  very  reasonable  rates,  varying  from  Id. 
to  2d.  per  ton  per  mile,  or  about  half  the  English  charges.  But  the  de- 
lays were  very  great ;  three  or  four  months  for  a  transit  of  150  miles  was 
quite  usual.  And  the  canals  paid  scarcely  1  per  cent,  dividend,  while 
their  English  cotemporaries  were  paying  5  to  20  per  cent.  . 

Communication  by  road  was  also  cheaper,  but  slower,  than  in  England. 
The  passengers  paid  from  IM.  to  3d.  per  mile,  instead  of  the  3d.  to  6d. 
paid  in  England.  But  they  only  traveled  five  to  six  miles  an  hour  in- 
stead of  the  English  eight  to  ten.  Goods  paid  by  road  about  od.  per  ton 
per  mile  for  ordinary  conveyance,  and  6d.  for  quick  despatch,  being  less 
than  half  the  English  charges.  The  distances  in  France  were  greater 
than  in  England,  the  commerce  was  less,  and  labor  and  food  were 
cheaper  ;  thus  fully  accounting  for  the  difference. 

Tramvv'ays  were  introduced  into  France  in  1823,  by  the  construction  of 
a  line  of  eleven  miles  from  the  coal  mines  of  St.  Etienne,  and  this  was 
followed  by  two  much  longer  lines  of  a  similar  character,  which  were 
opened  by  sections  between  1830  and  1834.  They  are  dignified  in  French 
books  with  the  title  of  railways,  but  they  were  really  nothing  but  horse 
tramways,  and  were  sometimes  even  worked  by  oxen. 

The  success  of  the  Manchester  and  Liverpool  railway  provoked  some 
real  though  sliort  railways  in  France,  especially  those  from  Paris  to  St. 
Germain  and  to  Versailles.  But  in  1837  only  85  miles  had  been  opened, 
against  nearly  500  in  England.     In  1837  and  1838  the  French  Chambers 

2 


18 

threw  out  a  scheme  of  their  government  for  the  construction  by  the  State 
of  an  extensive  system  of  railways,  but  granted  concessions  to  private 
companies  for  lines  to  Rouen,  Havre,  Dieppe,  Orleans,  and  Dunkerque. 
These  lines  were  abandoned  for  a  time,  in  1839,  for  want  of  funds. 

In  this  emergency  Mr.  Locke,  the  great  English  engineer,  restored  the 
fortunes  of  French  railways.  Assisted  by  the  London  and  Southwestern 
company,  and  Mr.  Brassey,  and  with  subventions  from  the  French  Gov- 
ernment, and  subscriptions  from  English  shareholders,  and  a  powerful 
corps  of  English  navvies,  he  recommenced,  carried  through  the  line  from 
Paris  to  Rouen,  and  from  Rouen  to  Havre,  and  fairly  gave  the  start  to 
railway  enterprise  in  France.  k 

In  1842  a  new  law  was  passed,  by  which  the  State  undertook  the  earth- 
works, masonry,  and  stations,  and  one-third  of  the  price  of  laud  ;  the  de- 
partments were  bound  to  pay  by  instalments  the  remaining  two-thirds  of 
the  land ;  and  the  companies  had  only  to  lay  down  rails,  maintain  the 
pei'maneut  way,  and  find  and  work  the  rolling  stock.  It  was  intended 
that  three-fifths  of  the  total  cost  should  be  home  by  the  State  and  depart- 
ments, and  two-fifths  by  the  companies.  Under  this  system  of  subventions,  a 
number  of  concessions  were  made,  the  shares  rose  to  50  per  cent,  premium, 
and  in  1848  a  total  of  1,092  miles  had  been  opened.  The  revolution  of 
1848  was  a  terrible  shock  to  their  credit,  and  shares  vrent  down  to  half 
their  value.  Many  lines  became  bankrupt  and  Avere  sequestrated,  and  for 
three  years  fresh  concessions  were  entirely  stopped.  But  the  concessions 
already  made  were  slowly  completed,  and  by  the  end  of  1851  France 
had  opened  2,124  miles  against  6,889  opened  in  the  United  Kingdom. 

In  1852  the  Emperor  took  French  railways  in  hand,  and  by  a  system 
of  great  wisdom,  singularly  adapted  to  the  French  people,  he  put  an  end 
to  the  previously  feeble  manao'ement,  and  launched  into  a  bold  course  of 
railway  development.     The  French  public  shrank  from  shares  without  a 
guarantee ;  he  gave  a  State  guarantee  of  4  or  5  per  cent,  interest.     The 
French  public  preferred  debentures  to  shares  ;  he  authorized    an   enor- 
mous issue  of  debentures.     The  companies  complained  of  the  shortness 
of  their  concessions  ;  he  prolonged  them  to  a  uniform  period  of  ninety- 
nine  years.     At  the  same  time  he  provided  for  the  interest  of  the  State  by 
a  rigid  system  of  government  regulation  and  audit.     And,  lastly,  coming 
to  the  conclusion  that  small  companies  were  weak  and  useless,  he  amal- 
gamated them  into  six  great  companies,  each  with  a  large   and    distinct 
territory  ;  and  able,  by  their  magnitude,  to  inspire  confidence  in  the  pub- 
lic, and  aid  the  government  in  the  construction  of  fresh  railways.     This 
vigorous  policy  was  very  soon  successful.     Capital  flowed  in  I'apidly,  con 
struction  proceeded  with  rapidity,  and  between  the  end  of  1851  and  1857 
the  length  of  the  railways  opened  was  increased  from  2,124  miles  to  4,475, 
or  more  than  doubled.'    England  at  that  time  had  opened  9,087  miles. 
France  was  now  exceedingly  prosperous.      Her  exports  and  imports 
had  increased  from  £102,000,000  in  1850,  to  £213,000,000  in  1857,  or 
more  than  100  per  cent  in  seven  years.     The  six  great  companies  were 
paying  dividends  which  averaged  10  per  cent. ;  and  the  government  guar- 
antee had  never  been  needed.     Railways  united  all  the  great  towns  and 
ports,  and  met  the  most  pressing  commercial  wants.     But  the  Emperor 
was  not  satisfied.     France,  v>'ith  double  the  territory  of  England,  had 
only  half  the  railway  accommodation,  and  wide  districts  between  all  the 
trunk  lines  were  totally  unprovided  with  railways.     The  government  en- 


I 


19 

gineers  of  the  ponts  et  chaussees  were  prepared  with  plans  and  estimates 
for  5,000  miles  of  lines,  which  had  been  inquired  into,  and  officially  de- 
clared to  be  dhdiUte  publique,  i.  e.,  a  public  necessity.  The  country  dis- 
tricts clamored  for  these  lines.  But  how  w^ere  they  to  be  made  ?  The 
public  were  not  prepared  to  subscribe  for  them,  the  government  could  not 
undertake  them,  an<l  the  great  companies  were  too  well  satisfied  with  their 
10  per  cent,  dividend  to  wish  to  endanger  it  by  unremunerative  branches. 
The  plan  of  the  Emperor  was  intricate  but  masterly.  He  said  to  the 
companies :  "  You  must  make  these  lines.  The  4,520  miles  of  railway 
already  made  shall  be  a  separate  system  for  the  present,  under  the  name 
of  Anclen  Reseau,  the  old  lines.  You  no  longer  require  the  guarantee 
of  the  State  for  these  lines.  But  I  will  give  you  an  extension  of  the 
ninety-nine  years  of  your  concessions,  by  allowing  them  to  commence  at 
later  dates ;  beginning  with  1852  for  the  Northern  Company,  and  at 
various  dates  for  the  rest,  up  to  1862,  for  the  Southern  Company.  I  also 
engage  that  £9,000,000  sterling  of  the  net  revenue  of  these  old  lines  shall 
for  ever  be  divisable  among  the  shareholders,  witliout  being  liable  for  any 
deficit  of  the  extension  lines,  an  amount  which  will  give  you  a  clear  and 
undefeasible  dividend  of  6  to  8  per  cent. ;  with  a  strong  probability — 
almost  a  certainty — of  getting  much  more  from  surplus  traffic." 

"  Next  the  new  lines,  5,128  miles  in  length,  shall  be  a  separate  system, 
"under  the  name  of  Nouveau  Reseau,  or  extension  lines.  Their  estimated 
cost  is  £124,000,000,  and  you,  the  companies,  may  raise  this  sum  b)''  de- 
bentures, on  which  the  government  will  guarantee  4  per  cent,  interest, 
and  .65  sinking  fund  for  the  paying  them  off  in  fifty  years.  Any  extra 
cost  you  must  pay  yourselves." 

These,  in  their  biiefest  possible  form,  are  the  terms  on  which  the  Em- 
peror imposed  an  average  of  nearly  1,000  miles  per  company  on  the  six 
great  companies  of  France.  They  were  accepted  with  considerable  re- 
luctance. Their  efiect  has  been  to  lower  the  value  of  the  shares  of  the 
great  companies,  for  the  bargain  is  considered  disadvantageous.  The  com- 
panies cannot  borrow  at  less  than  5.75,  so  losing  1.10  percent,  per  annum 
on  every  debenture  ;  and  as  the  lines  cost  more  than  the  £124,000,000, 
the  overplus  has  been  raised  by  the  companies  by  debentures,  for  which 
they  alone  are  resj)onsible.  But  on  the  other  hand,  they  get  an  immense 
amount  of  fresh  traffic  over  their  old  lines,  which  must  ultimately  more 
than  repay  this  loss.  English  railways  would  be  thankful  if  their  ex- 
tensions cost  them  so  little. 

In  the  following  years  other  lines  were  a(Jded,  with  similar  guarantees 
and  with  considerable  subventions  from  the  State,  and  in  1863  an  addi- 
tional series  of  lines,  1,974  miles  in  length,  were  imposed  on  similar 
terms,  but  with  some  modifications  of  the  conventions  with  two  of  the 
weakest  companies. 

Besides  the  government  lines,  the  Emperor  encouraged  to  the  utmost 
the  efforts  of  the  departments,  and  in  July,  1865,  a  law  was  passed  re- 
specting chehilns  cle  fer  d'interet  local,  which  authorized  departments  and 
communes  to  undertake  the  construction  of  local  railways  at  their  own 
expense,  or  to  aid  concessionaires  with  subventions  to  the  extent  of  one- 
fourth,  one-third,  or  in  some  cases  one-half  the  expense,  not  exceeding 
£240,000. 

Not  content  with  passing  this  law,  the  minister  of  public  works,  in  the 
very  next  month  wrote  to  the  prefets  of  the  88  departments  of  France, 


20 

to  acquaint  them  fully  with  its  provisions,  and  to  invite  them  to  commu- 
nicate with  their  councils  general,  and  deliberate  upon  the  subject.  The 
result  was  that  sixteen  councils  requested  their  prefets  to  make  surveys 
and  inquiries  to  ascertain  Avhat  lines  would  be  advisable.  32  departments 
authorized  their  prefets  to  prepare  special  plans,  and  even  to  make  pro- 
visional agreements  with  the  companies  to  carry  out  lines,  subject  to  con- 
firmation by  the  councils.  Two  of  these  made  immediate  votes,  viz.,  the 
department  of  Ain,  £56,000,  and  Herault,  £260,000,  for  lines  which  they 
approved,  A  third,  the  department  of  Calvados,  voted  subventions 
amounting  to  £1,000  per  mile  for  one  line,  and  £2,000  per  mile  for  an- 
other line.  Besides,  these  five  departments  put  railroads  into  immediate 
execution  by  contracts  with  independent  companies.     Among  these  were  : 

Subvention. 

Saone  et    Loire £14,000 

"      (besides  the  lanci) 40,000 

Manche  (with  an  English  company,   and  including  land) 40,000 

Rhone 240,000 

Tarn 171,000 

By  these  measures  the  Emperor  has  brought  up  the  concessions  to  the 
following  total : — 

Miles. 

Ancien  Reseau,  or  old  lines 5, 027 

Nbuveau      "     orextension   lines 7,565 


12,592 
Being  very  nearly  the  length  of  our  constructed  lines  in  1864. 

But  of  this  mileage  there  has  been  constructed  up  to  the  present   time  only 8,134 


Leaving   still  unconstructed 4,458 

being  one-third  of  the  whole  concessions.  Of  this,  1,800  miles  are  now 
being  constructed,  and  1,600  miles  are  expected  to  be  opened  by  the  end 
of  1867. 

Hence  the  lines  constructed  in  France  up  to  and  including  1865,  are 
8,134  miles,  or  about  the  same  length  as  the  lines  constructed  in  the 
United  Kingdom  to  the  end  of  1865  ;  so  that  France  is  ten  years  behind 
England  in  actual  length  of  railways  constructed,  and  at  least  fifteen 
years  behind  England  if  her  larger  territory  and  population  are  taken 
into  account ;  and  I  must  add  that  France  would  have  been  very  much 
farther  behind  had  it  not  been  for  the  vigorous  impulse  and  the  wise 
measures  of  the  Emperor  Napoleon. 

The  progress  of  completion  from  1837  to  the  present  time  is  shown  in 
the  following  table : — 

MILES  CONSTRUCTED.  Average  annual 

Year.                                                                                                     Miles  open.     Increase 
1837 85 

1840 338 


■} 


1845 508  I 

1850 1,807. 

1855 3,315 


} 

1860 5,586  I 

1865 8,134/ 


84 
34 
259 
301 
454 
509 


21 

This  shows  the  insignificant  rate  of  progress  up  to  1845,  and  the  larger 
but  still  slow  progress  up  to  1855.  From  that  time  the  effect  of  the  Em- 
peror's policy  becomes  visible  in  the  increased  rate  of  progression.  It 
is  expected  that  between  1852  and  1872  more  than  9,500  miles  will  have 
been  opened,  quadrupling  the  number  constructed  in  the  previous  twenty 
years,  and  coutributmg  in  the  highest  degree  to  the  prosperity  and 
wealth  of  the  French  nation. 

Railway  history  in  France  may  be  briefly  summed  up  in  four  periods: 

1.  The  period  of  independent  companies,  from  1831  to  1841. 

2.  The  period  of  joint  partneship  of  the  State  and  the  companies,  from 
1842  to  1851. 

3.  The  period  of  Imperial  amalgamations  and  guarantees,  from  1852  to 
1857. 

4.  The  period  of  guaranteed  extension  lines  from  1858  to  the  present 
time. 

VII. — Cost  and  Results  of  French  Railways. 

The  French  system  of  railway  organization  is  worthy  of  attentive 
study.  It  is  in  many  points  novel  to  an  Englishman;  it  is  often  charac- 
terized by  remarkable  talent ;  and  some  of  its  regulations  are  very  in- 
structive and  worthy  of  imitation. 

In  extent  the  French  lines  are  far  inferior  to  the  English,  whether 
judged  by  the  area  or  population  of  the  two  countries. 

COMPARISON    BY  AREA. 

Area  in  Railway  Mileage.  Square  Miles  per 

Country.                          Square  Miles.  1865.            Mile  of  Railway. 

United  Kingdom 120,927  13,289                               9 

France 211,852  8,134                             26 

COMPARISON  BY  POPULATION. 

Railway  Mileage.  Population  per 

Country.  Population,  1861.  1865.  Mile  of  Railway. 

United  Kingdom 29,321,000  13,289  2,206 

France 37,382,000  8,134  4,595 

Hence,  measured  by  area,  France  has  only  one-third  of  the  railway 
accommodation,  and  measured  by  population  only  one-half  of  the  railway 
accommodation  of  the  United  Kingdom. 

The  capital  authorized  and  expended  to  the  31st  December,  1865,  was 
as  follows : — 

CAPITAL  AUTHORIZED. 

Ancien  Reseau,  or  old  lines £151,000,000 

Nouveau     "       or  extension  lines 209,000,000— £360,000,000 

Including  64,000,000  subventions. 

CAPITAL  KXPENDED,    1866. 

Debentures £178,700,000 

Shares 54,800,000 

Subventions 27,500,000— £261,000,000 

So  that  the  French  companies  borrow  more  than  three  times  the  amount 
of  their  share  capital ;  reversing  the  English  rule,  of  borrowing  only  one- 
third  of  the  share  capital.     But  if  we  consider  preference  capital  as  a 


second  mortgage,  the  English  practice  is  to  borrow  an  amount  equal  to 
the  ordinary  share  capital.  This,  however,  is  still  a  long  way  fr/im  the 
French  regulations. 

The  capital  not  paid  up  is  nearly  £100,000,000.  Of  this  nearly  one-half 
will  be  required  in  the  next  three  years  for  lines  approaching  completion. 

The  cost  per  mile  of  French  railways  is  as  follows : — 

Ancien  Reseau $30,650 

Nouveau    "     27,350 

As  the  nouveau  reseau  is  almost  entirely  composed  of  single  lines,  this 
does  not  show  very  great  cheapness  of  construction.  We  are  making  our 
country  lines  much  cheaper,  particularly  in  Ireland  and  Scotland. 

The  eflect  of  railway  competition  with  canals  was  the  same  as  in  Eng- 
land. The  canal  rates  were  reduced  to  one-third  of  their  former  amount, 
and  the  canal  traffic  has  increased  instead  of  diminishing.  The  average 
railway  fares  and  rates  are  stated  by  M.  Flachat,  in  his  work  on  railways, 
to  be  6  to  7  centimes  for  each  passenger,  and  sou  per  kilometre,  being  Id. 
to  l-iV<^-  ps^*  mile,  as  compared  with  l^d.  per  mile,  the  average  on  Eng- 
lish railways. 

The  increase  of  traffic  since  1850  is  stated  in  the  official  returns  as  fol- 
lows : — 

INCEEASE  OP   TEAFFIC, 

Average 
Average  Annual  Increase  for 

Year.  Total  Receipts.  Annual  Increase.  Fifteen  Years. 

1850 £3,824,400  . 

\  £1,307,000" 

1855 10,358,000=^ 

\  1,217,000 

1860 16,443,000;^ 

\  1,192,000 

1865 22,400,000  -* 


£1,238,400 


Thus  the  increase  has  been  more  equable  than  in  England,  but  smaller 
in  amount,  showing  an  average  of  £1,238,400,  against  £1,423,000  in  Eng- 
land. But  I  see  it  stated  in  the  railway  papers  that  the  first  nine  months 
of  1866  show  much  more  than  the  usual  increase. 

M.  Flachat  gives  a  calculation  of  the  saving  to  the  nation  by  railway 
conveyance,  which  he  makes  a  minimum  of  £40,000,000  a  year.  But  it 
is  based  on  the  supposition  that  all  the  new  trade  would  have  been  car- 
ried by  road,  which  is  obviously  untenable.  Probably  £25,000,000  to 
£30,000,000  is  a  safer  estimate.  A  writer  in  th%  "Dictionaire  du  Com- 
merce" goes  into  elaborate  calculations  of  the  money-saving  arising  out 
of  the  greater  rapidity  of  railways,  and  values  it  at  £8,000,000,  on  the 
basis  that  the  time  of  a  French  citizen  is  worth  5d.  an  hour.  I  give  the 
passage  entire : — 

"  In  France,  the  number  of  kilometres  traveled  by  passengers  in  1856  was  2,200,000,- 
OOQ.  In  traveling  tliis  distance  they  would  have  spent  290,000,000  hours,  while  they 
have  only  been  50,000,000  hours  on  ihe  railway.  The  saving  in  time  of  traveling  by 
railway  has  therefore  been  240,000,000  hours,  which,  at  the  moderate  price  of  5d.  per 
hour,  represent  an  economy  of  120,000,000  frs.  Besides  this,  the  time  lost  in  stoppages 
at  small  inns  (auberges)  used  to  exceed  that  spent  in  traveling,  and  hence  on  this  head 
alone  we  may  calculate  on  a  saving  of  more  than  100,000,000  frs.  But  even  if  we  should 
reduce  this  valuation  to  80,000,000,  or  still  lower  to  60,000,000  trs.,  there  cannot  be  any 
doubt  that  the  saving  to  the  traveler  in  the  matter  of  time  alone  exceeds  200,000,000 
frs.  (£8,000,000)."— Vol.  i.,  p.  638. 


Passing  from  individuals  to  commerce,  the  effect  of  railways  has  heen 
very  marked,  and  is  warmly  acknowledged  by  the  principal  French 
writers.     The  following  table  shows  the  progress  of  French  trade: — 

INCREASE  OP  EXPOETS  AND  IMPORTS. 

Total  Exports  Increase  per  Cent. 

Year.                                       and  Imports.                Increase  per  Cent.  per  Annum. 

1840 £82,520.000  —  — 

1845  97,080,000  15..  3. 

1850  102,204,000  5.  1. 

1855  173,076,000  50.  10. 

1860  232,192,000  34.  6.8 

1865  293,144,000  26.25  5.25 

The  revolution  of  1848  accounts  for  the  small  increase  between  1845 
and  1850,  but  it  is  plain  that  the  great  increase  in  French  commerce  was 
between  1850  and  1860,  contemporaneously  with  the  great  development 
of  railways.  When  traveling  in  France  I  have  always  heard  railways 
assigned  as  the  cause  of  their  present  commercial  prosperity. 

The  proportion  which  the  exports  and  imjjorts  bore  to  the  means  of 
communication  is  shown  in  the  following  table : — 

PROPORTION  OP   EXPORTS   AND  IMPORTS  TO  RAILWAYS  AND  NAVIGATION. 

Navigations  Exports  and  Imports 

(7,700  miles),  per 
Year.                                     and  Railways.        Exports  and  Imports.        Mile  Open. 

1840 8,264  £82,520,000  £9,985 

1845 8,547  97,080,000  11,358 

1850 9,507  102,204,000  10,750 

1855 11,015  173,076,000  15,712 

1860 13,286  232,192,000  17,476 

1865 15,830  293,144,000  18,518 

Here  there  is  a  steady  rise  in  the  amount  per  mile,  checked  only  by 
the  revolution  of  1848.  But  the  principle  that  there  is  a  distinct  corres- 
pondence between  means  of  communication  and  the  exports  and  imports 
is  already  shown. 

The  effect  of  railways  on  the  condition  of  the  working  classes  has  also 
been  very  beneficial.  The  extreme  lowness  of  fares  enables  them  to 
travel  cheaply,  and  the  opportunity  is  largely  used.  The  number  of 
third  class  passengers  in  France  is  75  per  cent,  of  the  total  passengers, 
against  only  58  per  cent,  in  England  (M,  Flachat,  p.  60).  The  result  of 
these  facilities  of  motion  has  been  an  equalization  of  wages  throughout  the 
country,  to  the  great  benefit  of  the  rural  populations.     M.  Flachat  says : — 

"  Railways  found  in  France  great  inequnlity  in  the  wages  of  laborers;  but  they  are 
constantly  remedying  it  Wherever  they  were  constructed  in  a  district  of  low  wages, 
employment  was  eagerly  sought.  The  working  classes  rapidly  learnt  to  deserve  high, 
wages  by  the  greater  quantity  of  work  done.  Agriculture  had  been  unable  to  draw  out 
the  capabilities  of  its  workmen,  and  was  for  the  moment  paralyzed  by  want  of  hands; 
but  industry  developed  fresh  resources.  The  total  amount  of  work  done  was  consid- 
erably increased  all  over  the  country.  The  difficulties  of  agriculture  were  removed  by 
obtaining  in  return  for  higher  wages  a  larger  amount  of  work  than  before,  and  also 
because  machines  began  to  be  used  in  cultivation.  Everywhere  it  was  evident  that 
increased  energy  accompanied  increased  remuneration.  This  is  the  point  in  which  rail- 
ways have  most  powerfully  increased  the  wealth  of  France.  The  moral  result  of  this 
improvement  in  the  means  of  existence  of  the  working  class  has  been  to  diminish  the 
distance  which  separates  the  man  who  works  only  for  himself  from  the  man  who  labors 
tor  a  master.  In  the  education  of  the  workman's  childien,  in  his  clothing,  in  his  do- 
mestic life,  and  even  in  bis  amusements,  there  is  now  an  improvement  which  i:aises  him 
nearer  to  his  master." — pp.  78  and  79. 


24 

I  am  sure  we  shall  all  rejoice  at  this  evidence  of  the  benefits  conferred 
by  railways  upon  the  working  classes  of  that  great  neighboring  nation. 
I  wish  there  Avas  time  to  give  you  additional  extracts,  showing  the  im- 
mense services  of  railways  to  the  industry  of  France,  showing  tliat  France 
was  kept  back  by  the  difficulty  of  communication,  by  the  immense  dis- 
tances to  be  traversed  and  the  impossibility  of  conveying  cheaply  and 
rapidly  the  raw  materials  of  manulactures.  Railways  have  supplied  this 
want,  and  have  given  a  new  impetus  to  production  and  new  outlets  for 
the  produce. 

Turning  to  the  shareholders,  there  are  some  curious  facts  which  sur- 
prised me  not  a  little.  The  popular  notion  is,  that  in  France  railway 
traffic  bears  a  much  higher  proportion  to  capital  expended  than  in  Eng- 
land. The  phrase  "  They  manage  these  things  better  in  France"  is  for- 
ever on  the  lips  of  the  British  shareholder  when  he  talks  of  his  own  paltry 
4^-  per  cent,  dividend,  or  of  the  8 1  per  cent,  gross  receipts.  The  world  in 
general  believe  that  a  10  or  12  per  cent.  French  line,  like  the  Orleans  of 
France,  really  has  a  traffic  of  at  least  that  amount.  But  this  is  an  entire 
mistake.  The  gross  traffic  receipts  of  France  are  now  9.6  per  cent,  on 
the  share  and  debenture  capital,  or  1  per  cent,  more  than  in  England. 
And  the  net  receipts,  after  deduction  of  45  per  cent,  working  expenses, 
are  now  5.28  per  cent,  on  the  total  share  and  debenture  capital,  being  .82 
or  about  four-fifths  per  cent,  higher  than  in  England.  Yet  the  French 
companies  pay  an  average  dividend  of  10  per  cent.,  while  the  English 
pay  only  the  natural  dividend  of  4?.  Here  are  the  figures,  for  the 
benefit  of  the  sceptical : — 

AVERAGE  RECEIPTS  AND  DIVIDENDS  PER  CENT. 

Name  of  Company.  1859.  1861.  1865. 

Gross  receipts 10.5 

Net  profits 5.1 

Dividends  of  Great  Companies  : 

Nord 15. 

Orleans 18. 

Midi 4. 

Quest 1.5 

Est 3.13 

Mediterrannee 10.6 

Average 10.54  13.  10.53 

Compare  these  figures  with  those  for  the  English  lines  given  above. 
You  will  see  the  remarkable  correspondence  between  the  gross  and  net 
receipts  and  the  very  remarkable  dissimilarity  in  the  dividends.  How  is 
this  accounted  for? 

Look  at  the  table  of  capital  expended.  Disregarding  the  £27,500,000 
subventions,  as  corresponding  to  the  dixierae  tax  paid  by  the  companies, 
there  is  £233,000,000  share  and  debenture  capital,  out  of  which  a  por- 
tion of  the  debentures  are  charged  to  capital  under  the  conventions  for 
the  extension  lines.  Being  for  new  railways  they  have  not  yet  been  trans- 
ferred to  the  revenue  account.  Hence  the  interest-bearing  capital  re- 
duced, and  the  interest  itself  increased. 

The  large  amount  of  debentures  now  comes  into  play,  on  which  there 
is  paid  fi'om  5  to  5^  per  cent.,  leaving  an  overplus  to  accumulate  for  the 
shares,  so  raising  the  interest  on  shares  to  nearly  7  per  cent. 


11. 0 

9.6 

6.2 

5.28 

16.5 

17. 87 

20. 

11.2 

10. 

8. 

8.5 

7.5 

8. 

6.6 

15. 

12. 

25 

But  this  is  not  enough.  In  1863  the  State  bound  itself  to  contribute 
to  certain  lines  annual  subventions,  which  in  1865  came  to  £551,000,  and 
the  State  also  paid  during  the  same  year,  in  respect  of  their  guarantees  of 
the  debentures  in  the  nouveuu  reseau,  £1,320,000,  making  a  total  sul)ven- 
tion  in  1865  of  £1,871,000,  an  amount  sufficient  to  pay  more  than  3  per 
cent,  on  the  share  capital  of  £54,800,000.  The  guarantee  of  £1,220,000 
on  the  nonveau  reseau,  however,  is  not  an  absolute  subvention,  as  it  will 
be  repayable  gradually  by  the  companies  when  their  income  exceeds  a 
fixed  amount.  It  is  therefore  a  loan  by  the  State,  repayable  on  the  oc- 
currence of  a  contingency,  and  at  an  uncertain  date. 

Thus  the  original  interest  of  5.28  per  cent,  on  the  share  and  debenture 
capital  becomes  10  per  cent,  to  the  shareholder.  It  is  a  wonderfully 
clever  ari'angement  and  would  be  exceedingly  palatable  to  Great  Eastern 
or  even  Great  Northern  shareholders. 

But  consider  the  difference  which  this  shows  in  the  ideas  of  the  two 
countries.  In  England  it  would  never  be  borne  for  an  instant  that  six 
great  companies,  say  the  London  and  Noi'thwestern,  Great  Western, 
Midland,  and  others,  should  receive  10  percent,  dividend  and  yet  obtain 
from  the  State  annual  subventions  and  guarantees  amounting  to  £1,800,- 
000.  No  ministry  dare  propose  such  a  job.  The  reform  agitation  would 
be  nothing  to  the  clamor  with  which  it  would  be  greeted ;  and  yet  in 
France  it  is  the  most  natural  thing  possible.  Nobody  says  a  word  against 
it.  Nay,  the  feeling  of  the  French  companies  and  the  popular  opinion 
is  that  these  poor  10  per  cent,  shareholders  have  been  badly  used,  and 
that  their  legitimate  12  or  15  per  cent,  from  the  trunk  lines  ought  not  to 
have  been  lessened. 

One  characteristic  of  the  French  systems  is  the  absence  of  competition, 
and  this  is  opposed  to  all  our  ideas  of  freedom  of  communication.  The 
Northern  Company  monopolizes  the  whole  traffic  between  Calais  and 
Paris.  The  Mediterranean  Company  monopolizes  the  whole  traffic  be- 
tween Paris  and  Marseilles,  a  traffic  of  extraordinary  importance  and 
value.  An  attempt  made  two  years  ago  by  another  company  to  abtain 
an  extension  to  Marseilles  and  to  establish  an  alternative  route  was  re- 
jected by  a  government  commission  after  a  very  long  inquiry.  The  con- 
sequence of  this  system  is  a  great  concentration  of  traffic  in  a  small  num- 
ber of  trains,  to  the  profit  of  the  companies  and  to  the  inconvenience  of 
the  traveler.  There  are  in  England,  between  places  like  Liverpool  and 
London,  about  three  times  as  many  trains  as  there  are  in  France,  between 
Marseilles  and  Paris.  And  besides  this,  goods  are  sent  less  rapidly  in 
France  and  delivered  with  less  punctuality. 

But  there  is  a  great  deal  to  be  said  in  defence  of  the  French  system. 
It  avoids  the  duplicate  lines  necessary  for  competition,  which  France 
could  not  well  aflbrd.  It  keeps  the  companies  prosperous  and  able  to  aid 
the  government  in  raihvay  extension.  It  is  not  an  irresponsible  monop- 
oly, able  to  charge  high  prices  to  its  customers,  but  a  strictly  regulated 
monopoly,  with  its  tariff  fixed  by  government  at  the  lowest  prices  that 
will  be  remunerative.  It  is  like  the  system  of  our  own  Metropolitan  Gas 
and  Water  Companies,  which  enjoy  a  monopoly  within  defined  districts, 
on  terms  settled  by  the  law  and  revised  from  time  to  time  in  the  interest 
of  the  public.  The  French  government  appoints  commissioners  of  in- 
quiry to  examine  into  any  defect  or  to  consider  improvements,  and  they 
report  to  the  minister  of  public  works,  who  has  the  power  of  making  reg- 


ulatlons  which  are  binding  on  the  companies.  The  last  commission  is  a 
good  instance.  In  February,  1864,  the  minister  of  public  works  issued 
to  the  companies  a  circular  suggesting  several  points  which  required  im- 
provement, and  the  commission  was  appointed  to  consider  their  answers. 
The  points  discussed  were : — 

1.  The  adoption  of  a  means  of  communication  between  the  guard  and 
engine-driver.     This  was  made  obligatory  on  the  companies. 

2.  A  means  of  communication  between  passengers  and  the  guard. 
This  was  accepted  by  the  companies. 

3.  The  consumption  by  the  locomotives  of  their  own  smoke.  This 
was  ordered  to  be  carried  out  within  two  years. 

4.  The  addition  of  second  and  third  class  carriages  to  express  trains. 
The  recommendation  of  the  commission  was  accepted  by  the  companies. 

5.  Separate  carriages  for  unprotected  females. 

6.  The  commission  demanded  that  on  the  great  lines  the  speed  of  goods 
trains  should  be  increased  from  60  miles  to  120  miles,  without  any  in- 
crease of  tariff.  This  very  important  question  was  referred  to  a  sub- 
committee for  further  examination  and  for  hearing  objections. 

From  these  details  it  is  evident  that  the  interests  of  the  public  are  well 
looked  after. 

I  should  add  that  there  is  a  continuous  audit  of  the  accounts  of  the 
companies  by  government  accountants,  who  attend  from  week  to  week 
at  the  companies'  offices  for  that  pur]Dose. 

I  will  at  present  mention  only  one  other  point  in  French  railway  law — 
that  the  government  has  the  power  of  purchasing  any  line  of  railway 
after  fifteen  yeai'S  from  its  first  concession.  The  price  is  to  be  fixed  by 
taking  the  amount  of  the  net  profits  of  the  seven  preceding  years,  deduct- 
ing the  two  lowest  years  and  striking  the  average  of  the  remaining  five 
years.  The  government  is  then  to  pay  to  the  company  for  the  remain- 
der of  the  concession  an  annual  rent-charge  or  annuity  equal  to  the 
average  so  determined,  but  not  less  than  the  profits  of  the  last  of  the 
seven  years.  This  mode  of  purchase  appears  preferable  to  the  English 
law,  since  it  does  not  require  the  creation  of  any  new  rentes  or  consols, 
and  I  commend  it  to  the  notice  of  Mr.  Gait. 

I  have  mentioned  these  prominent  features  of  the  French  law  in  the 
hope  that  they  may  be  useful  in  suggesting  improvements  in  the  English 
system. 

Why  should  we  not  vest  in  the  President  of  the  Board  of  Trade  a 
power  of  making  and  enforcing  regulations  for  the  public  safety  and 
convenience?  VVhy  should  we  not  introduce  more  frequent  railway 
commissions  to  consider  important  questions  and  recommend  to  the  Pres- 
ident of  the  Board  of  Trade  or  to  Parliament?  Why  should  we  not 
have  a  modified  system  of  audit,  and  a  registration  of  shares  and  de- 
bentures ? 

VIII. — Railways  in  Belgium  akd  Holland. 

Belgium  is  one  of  the  most  striking  instances  of  the  benefit  of  railwavs. 
In  1830  she  separated  from  Holland,  a  country  which  possessed  a  much 
larger  commerce  and  superior  means  of  communication  with  other  na- 
tions by  sea  and  by  canals.  Five  years  hiter  the  total  exports  and  im- 
ports of  Belgium  were  only  £10,800,000,  while  those  of  Holland  were 
double  that  amount.     But  in  1833  the  Belgian  government  resolved  to 


27 

adopt  tlie  railway  system,  and  employed  George  Stephenson  to  plan  rail- 
ways between  all  the  large  towns.  The  law  authorizing  their  construc- 
tion at  the  expense  of  the  State  passed  iii  1834,  and  no  time  %vas  lost  in 
carrying  it  out.  Trade  at  once  received  a  new  impetus,  and  its  progress 
since  that  time  has  been  more  rapid  than  in  any  other  country  in  Europe. 
The  following  table  shows  the  activity  with  which  the  lines  Avere  con- 
structed. We  must  remember  that  Belgium  contains  only  one-tenth  of 
the  area  of  the  United  Kingdom,  and  that  to  make  a  fair  comparison 
with  our  own  progress  we  must  multiply  the  table  by  ten. 

MILES  CONSTKUCTED. 

Increase  per  annum 
Year.  Miles  Open.  Miles. 

1839 185. 

I  25 


1845 335 

1853 720 


} 


I  45 

1860 1,037  \ 

\  78 

1864 1,350  ' 

Hence,  the  progress  for  a  State  of  the  size  of  the  United  Kingdom 
would  have  been — 

Miles  a  Year. 

1839  to  1845 250 

1845  to  1853 480 

1853  to  1860 450 

1860  to  1864 750 

a  rate  of  increase  which  is  as  great  or  greater  than  our  own. 
The  results  on  commerce  are  shown  in  the  following  table : — 

INCREASE  OF  EXPORTS  AND  IMPORTS. 

Increase  Increase  per  Cent. 

Year.                                 Exports  and  Imports       per  Cent.  per  Annum. 

1835 £10,760,000. 

\  45.72  11.43 

1839 15,680,000^ 

\  71.4  11.9 

1845 26,920,000  \ 

\  77.41  9.67 

1853 47,760,000 :{ 

\  51.  7.3 

1860 72,120,000^ 

\  35.88  9. 

1864 97,280,000-' 

I  need  scarcely  point  out  the  extraordinary  character  of  this  increase, 
which  is  enormous  in  the  first  ten  years,  and  far  beyond  either  England 
or  France,  and  is  not  inferior  to  us  in  the  later  period.  In  the  tliirty 
years  from  1835  to  1864  Belgium  increased  her  exports  and  imports 
nearly  tenfold,  while  England  increased  hers  only  fivefold.  If  we  had 
increased  our  commerce  in  the  same  ratio,  the  English  exports  and  im- 
ports would  now  be  a  thousand  million  pounds  sterling. 

The  proportion  between  exports  and  imports  and  means  of  communi- 
cation is  shown  in  the  following  table,  which  differs  from  those  of  En- 
gland and  France  in  the  rapid  increase  per  mile : — 


28 

PROPORTION  OF  EXPORTS  AND  IMPORTS  TO  EAILTCATS  AND  NAVIGATIONS. 

Canals  (910  Miles)  Exports  and  Imports 
Year.                                    and  Railways  Ojien.    Exports  and  Imports,     per  .Mile  Open 

1839 1,055  £15.680,000  £14,862 

1845 1,205  26.920,000  22,340 

1853 1,590  47.760,000  30,037 

1860 1.907  72,120,000  37.818 

1864 2,220  97,280,000  42,919 

This  enormous  increase  of  Belgian  commerce  must  be  ascribed  to  her 
wise  system  of  railway  development,  and  it  is  not  difficult  to  see  how  it 
arises.  Before  railways,  Belgium  was  shut  out  from  the  continent  of 
Europe  by  the  expensive  rates  of  land  carriage  and  her  want  of  water 
communication.  She  had  no  colonies  and  but  little  shipping.  Railways 
gave  her  direct  and  rapid  access  to  Germany,  Austria,  and  France,  and 
made  Ostend  and  Antwerp  great  continental  ports.  One  of  her  chief 
manufactures  is  that  of  wool,  of  which  she  imports  21,000  tons,  valued  at 
£2,250,000,  from  Saxony,  Prussia,  Silesia,  Poland,  Bohemia,  Hungary, 
Moravia,  and  the  southern  Provinces  of  Russia ;  and  returns  a  large  por- 
tion in  a  manufactured  state.  She  is  rapidly  becoming  the  principal 
workshop  of  the  continent,  and  every  development  of  railways  in  Europe 
must  increase  her  means  of  access  and  add  to  her  trade. 

Now  look  at  Holland,  which  in  1835  was  so  much  her  superior.  Hol- 
land was  possessed  of  immense  advantages  in  the  perfection  of  her  canals, 
which  are  the  finest  and  most  numerous  in  the  world  ;  in  the  large  ton- 
nage of  her  shipping ;  in  her  access  by  the  Rhine  to  the  heart  of  Ger- 
many ;  and  in  the  command  ^of  tlie  German  trade,  which  was  brought  to 
her  ships  at  Amsterdam  and  Rotterdam.  The  Dutch  relied  on  these  ad- 
vantages and  neglected  railways.  The  consequence  was,  that  by  1850 
they  found  themselves  rapidly  losing  the  German  trade,  which  was  being 
diverted  to  Ostend  and  Antwerp.  The  Dutch  Rhenish  railway  was  con- 
structed to  remedy  this  loss,  and  was  partly  ojiened  in  1853,  but  not  fully 
till  1856.  It  succeeded  in  regaining  part  of  the  former  connection.  But 
now  observe  the  result.  In  1839  the  Dutch  exports  and  imports  were 
£28,500,000,  nearly  double  those  of  Belgium.  In  1862  they  were  £59,- 
000,000,  when  those  of  Belgium  were  £78,000,000.  Thus  while  Holland 
had  doubled  her  commerce  Belgium  had  increased  fivefold,  and  had 
completely  passed  her  in  the  race. 

Before  leaving  Belgium  I  ought  to  mention  the  cheapness  of  fares  on 
her  railways,  which  have  always  been  much  below  those  on  English  lines  ; 
a  further  reduction  has  lately  been  made,  and  I  see  by  a  French  paper 
that  the  results  has  been  to  increase  the  passenger  receipts  on  the  State 
lines  for  the  month  of  April  from  76,956  frs.  in  1865  to  198,345  frs.  in 
1866,  of  which  168,725  frs.  was  from  third  and  fourth  class  passengers; 
a  fact  which  is  in  favor  of  the  plan  of  Mr.  Gait.  But  it  must  be  remem- 
bered that  Belgium  is  the  most  densely  populated  country  in  the  world, 
having  432  inhabitants  to  the  square  mile,  while  the  United  Kingdom  has 
only  253,  and  England  and  Wales  347.  A  system  which  will  pay  admi- 
rably between  large  cities  at  short,  distances  from  each  other,  and  on  lines 
which  cost  little  to  construct,  might  break  down  completely  on  lines  of 
expensive  construction  in  more  thinly  inhabited  districts.  Mr.  Gait  takes 
his  instances  from  railways  in  dense  populations,  and  applies  the  rules 
thus  obtained  to  railways  which  are  under  totally  diflferent  conditions,  and 
I  fear  that  this  vitiates  in  a  great  degree  the  soundness  of  his  conclusions. 


29 


IX. — Railways  iis  iHi:  United  States. 

In  any  paper  on  foreign  railways  it  is  impossible  to  omit  the  United 
States,  a  country  where  they  have  attained  such  gigantic  proportions. 
The  increase  ol  United  Slates  lines  is  as  follows : 

MILES  CONSTRUCTED.  Total         Idc.    per    an- 

Year.  mileage.       num.     Miles. 

1830 41  I  215 

1840 2,191  \ 

\  465 

1845 4,522  ' 

}  590 

1850 7,475:^ 

}  1,984 

1855 17,398:^ 

V  2,274 

1860 28,771  :| 

1864 33,860/  ^'^^^^ 

The  mileage  here  shown  is  something  enormous  :  four  time  that  of 
France,  two  and  a  half  that  of  England,  and  nearly  as  large  as  the  total 
mileage  of  the  United  Kingdom  and  Europe,  which  is  about  42,000  miles. 

In  so  young  a  country  inland  traffic  gives  these  lines  the  greater  part 
of  their  employment,  and  there  are  no  masses  of  expensive  manufactured 
goods  as  in  England  or  Belgium  to  swell  the  total  value  of  foreign  trade. 
Foreign  commerce  is  still  in  its  infancy,  but  an  infancy  of  herculean  pro- 
portions, as  the  following  table  shows : — 

INCREASE    OP   EXPORTS   AND  IMPORTS. 

Total  exports         Increase         Inc.    per  ct. 
Year.  and  imports.        per  cent.         per  annum. 

1830 £31,000,0001  4^_g(,  3_4Q 

1844 45,759,000i 

[  50.00  8.33 

1850 68,758,000] 

>■  62.60  12.52 

1855 111,797,000] 

1860 158,810,000 1  ^^^.OO  8.40 

The  advance  in  the  annual  increase  is  very  striking,  being  from  82  per 
cent,  per  annum  in  the  infancy  of  railways,  to  8  and  12  per  cent,  when 
their  extension  was  proceeding  rapidly.  Before  the  introduction  of  rail- 
ways America  possessed  a  very  extensive  system  of  canals,  which  amounts 
to  nearly  6,000  miles.  At  the  present  time  both  canals  and  railways  are 
crowded  with  traffic.  The  following  table  shows  the  relation  between  the 
growth  of  trade  and  the  increase  of  means  of  communication  : — 

PROPORTION    OF    EXPORTS    AND    IMPORTS   TO    RAILWAYS    AND    CANALS. 

Canals  (6,000  Total  ex-  Exports 

miles)  and                  ports  and  im- 

railways  and  im-  ports  per 

Year.                                                                         open.                     ports.  mile. 

1830 6,040  £31,000,000  5,130 

1844 10,310                    45,759,000  4,437 

1850 13,475                    68,758,000  5,102 

1855 23,398  111,797,000  4,778 

1860 34,770  158,810,000  4,567 


80 

Thus,  in  the  United  States,  as  well  as  in  England,  France,  and  Bel- 
gium, the  exports  and  imports  bear  a  distinct  relation  to  the  miles  of  com- 
munication open,  but  lower  in  amount  than  in  the  European  countries,  as 
was  only  likely  from  the  thinner  po})ulation. 

Vast  as  is  the  mileage  of  the  American  railways  it  is  by  no  means  near 
its  highest  point.  The  lines  in  construction,  but  not  yet  completed,  are 
stated  to  be  more  that  15,000  miles  in  length,  a  larger  number  than  the 
whole  mileage  of  the  United  Kingdom,  completed  and  uncompleted. 

The  manner  in  which  these  lines  are  made  is  very  remarkable.  The 
United  States  are  very  thinly  populated,  not  containing  on  an  average 
more  than  32  persons  pei'  square  mile  in  tlie  Northern  States,  and  11  in 
the  Southern.  Even  the  most  populous  Northern  States  have  only  90 
persons  per  square  mile,  while  England  and  Yv'^ales  have  347  per  square 
mile.  A  less  expensive  railway,  of  smaller  guage,  was,  therefore,  neces- 
sary, and  the  lines  are  almost  invariably  "  single  tracks."  Their  first 
cost  have  averaged  from  £7,000  up  to  £io,000  per  mile,  or  about  one- 
third  of  the  expenditure  in  England.  Of  course  they  are  very  inferior 
in  weight  of  rails  and  in  sleepers,  ballasting,  stations,  and  efficiency.  Even 
this  expense  was  difficult  to  provide  for  where  the  inhabitants  are  so  widely 
scattered.  But  in  America  the  greatest  encouragement  is  given  to  rail- 
roads, and  every  facility  is  afforded  for  their  extension,  as  they  are  con- 
sidered the  most  important  sources  of  wealth  and  prosperity.  Shares  are 
taken  largely  by  the  inhabitants  of  the  district  traversed,  land  is  often 
voted  by  the  State,  and  the  cities  and  towns  find  part  of  the  capital  by 
giving  security  on  their  municipal  bonds. 

I  must  not  omit  to  mention  the  great  Pacific  railways,  one  of  which  is 
now  being  constructed  from  the  State  of  Missouri  for  a  distance  of  2,400 
miles  across  Kansas,  Nebraska,  Utah,  and  Nevada  to  San  Francisco,  in 
California.  It  receives  from  the  general  government  subsidies  of  £3,300, 
£6,600,  or  £9,900  per  mile,  according  to  the  difficulty  of  the  ground,  be- 
sides enormous  grants  of  land  on  each  side  of  the  line.  When  this  rail- 
way is  completed  the  journey  from  Hong  Kong  to  England  will  be  made 
in  thirty-three  days  instead  of  the  present  time  of  six  weeks,  and  it  is  an- 
ticipated that  a  large  portion  of  our  Chinese  traffic  will  pass  by  this  route. 

No  one  can  study  the  United  States  without  being  struck  by  the  great 
railway  future  which  lies  before  them,  when  their  immense  territories  are 
more  thickly  peopled,  and  their  mineral  resources  and  manufactures  have 
been  developed.  The  distances  to  be  traversed  are  so  vast,  and  the  traffic 
to  be  carried  will  be  so  enormous  that  the  railways  of  the  United  States 
will  far  exceed  in  extent,  and  in  the  trade  which  will  pass  over  them, 
anything  that  has  hitherto  been  known  in  the  history  of  the  world. 

X. — Railways  and  Free  Trade. 

In  the  preceding  sections  I  have  endeavored  to  describe  the  progress  of 
railway  extension  in  England,  France,  Belgium,  and  the  United  States, 
the  four  countries  where  it  has  received  the  greatest  development,  and  I 
have  pointed  out  the  very  great  increase  of  commerce  and  national  pros- 
perity which  have  been  its  result.  But  in  the  case  of  England,  I  am 
bound  to  meet  a  very  probable  objection.  1  shall  be  asked,  why  do  you 
attribute  this  increase  of  commerce  mainly  to  railways  ?  Was  it  not 
caused  by  free  trade  ? 


81 

The  general  opinion  undoubte Jly  le,  tiiat  free  trade  is  the  principal 
cause  of  the  immense  increase  since  1842  of  English  commerce.  We  see 
this  opinion  expressed  every  day  in  newspapers  and  reviews,  in  speeches 
and  parliamentary  papers.  I  hold  in  my  hand  a  very  able  memorandum, 
lately  issued  by  the  Board  of  Trade,  respecting  the  progress  of  British 
commerce  before  and  since  the  adoption  of  free  trade,  in  which  the  same 
view  is  taken,  and  in  which  the  statistics  of  the  exports  and  imports  since 
1842  are  given  as  mainly  the  result  of  free  trade.  It  is  true  that  there 
is  a  reservation,  acknov.ledging  "  that  the  increase  of  productive  power 
and  other  causes  have  materially  operated  in  effecting  this  vast  develop- 
ment." But  in  the  newspaper  quotations  and  reviews  this  reservation  was 
left  out  of  sight,  and  the  striking  results  recorded  in  the  memorandum 
were  entirely  ascribed  to  free  trade. 

While  acknowledging  to  the  full  the  g)-oat  benefits  and  the  enlightened 
principles  of  free  trade,  I  have  no  hesitation  in  saying  that  this  popular 
view  is  a  popular  exaggerati<.n,  which  it  is  the  duty  of  staticians  to  cor- 
rect, and  1  think  that  my  reasons  will  be  considered  satisfactory  by  this 
Society.  In  the  first  place,  the  development  of  English  commerce  began 
in  1834,  before  free  trade,  but  simultaneously  with  railways  ;  and  be- 
tween 1833  and  1842  the  exports  and  imports  increased  from  a  stationarv 
position- at  £85,500,000  to  £112,000,000,  or  31  per  cent.  In  the  next 
place,  from  1842  till  1860  England  was  the  only  country  which  adopted 
free  ti-ade.  If  England  had  also  been  the  only  country  that  made  such 
enormous  progress  we  might  safely  conclude  that  free  trade  was  the  chief 
cause  of  so  great  a  fact.  But  this  is  not  the  case.  England  is  only  one 
of  several  countries  which  made  an  equal  advance  during  the  same  pe- 
riod, and  none  of  those  countries,  except  England,  had  adopted  free  trade. 
The  total  increase  of  exports  and  imports  from  1842  to  1860  in  the  three 
first  countries  described  in  this  paper,  and  from  1844  to  1860  in  the 
United  States,  was  as  follows  : — 

Increase 
Country.  1842.  1860.  percent. 

England £112,000,000       £3T5, 000,000  234 

France 86,280,000  232,200,000  169 

Belgium 19,400,000  72,120,000  272 

1844. 
United  States 45,757,000  158,810,000  305 

Thus,  the  English  rate  of  increase  is  only  third  in  order,  and  is  ex- 
ceeded both  by  Belgium  and  the  United  States.  If  the  latter  country  is 
objected  to  on  account  of  its  rapid  growth  in  population  by  immigration, 
still  Belgium  remains,  exceeding  the  English  rate  of  increase  by  36  per 
cent.  Look  at  the  argument  by  induction.  Here  are  ibur  countries 
under  the  same  condition  of  civilization,  and  having  access  to  the  same 
mechanical  powers  and  inventions,  which  far  outstrip  contemporary  na- 
tions. It  is  a  probable  conclusion  that  the  same  great  cause  was  the 
foundation  of  their  success.  What  was  that  common  cause  ?  It  could 
not  be  free  trade,  for  only  one  of  the  countries  had  adopted  a  free  trade 
poli(.-y.  But  there  was  a  common  cause  which  each  and  all  of  those  four 
countries  liad  pre-eminently  developed — the  power  of  steam — steam  ma- 
chinery, steam  navigation,  and  steam  railways.  I  say,  then,  that  steam 
was  the  main  cause  of  this  prodigious  progress  of  England  as  well  as  of 
the  other  three  countries. 


32 

But  I  will  go  a  step  farther.  Steam  machinery  had  existed  for  very 
many  years  before  1830,  and  before  the  great  expansion  of  commerce. 
Steam  navigation  had  also  existed  for  many  years  before  1830,  and  before 
the  great  expansion  of  commerce,  and  steam  navigation  was  unable  to 
cope  with  the  obstacle  which  before  1830  was  so  insuperable,  viz :  the 
slowness  and  expense,  and  limited  capacity  of  land  carriage. 

I  come,  then,  to  this  further  conclusion,  that  the  railways  which  re- 
moved this  gigantic  obstacle,  and  gave  to  land  carriage  such  extraordi- 
nary rapidity  and  cheapness,  and  such  unlimited  capacity,  must  have 
been  the  main  agent,  the  active  and  immediate  cause  of  this  sudden  com- 
mercial development. 

This  conclusion  appears  to  become  a  certainty  when  I  find,  from  the 
investigation  through  which  we  have  traveled,  that  in  every  one  of  these 
four  great  examples,  the  rapid  development  of  commerce  has  synchron- 
ised with  an  equal  rapid  development  of  railways — nay,  that  the  de- 
velopment of  commerce  has  been  singularly  in  proportion  to  the  increased 
mileage  of  railways — so  that  each  expansion  of  the  railway  system  has 
been  immediately  followed,  as  if  by  its  shadow,  by  a  great  expansion  of 
exports  and  imports. 

But  I  will  not  leave  the  case  even -here.  Consider  what  are  the  bur- 
dens which  press  upon  trade  and  manufactures.  If  our  merchairts  could 
be  presented  with  that  wondrous  carpet  of  the  Genii  of  the  "  Arabian 
Nights,"  which  transported  whatever  was  placed  upon  it  in  one  instant 
through  the  air  to  its  farthest  destination,  overleaping  mountains  and 
seas  and  custom-houses,  without  expense  or  delay,  we  should  have  the 
most  perfect  and  unburdened  intercourse.  But  see  what  barriers  and 
burdens  there  are  in  actual  fact,  when  we  trace  the  journey  of  the  raw 
material,  such  as  cotton  or  wool,  to  the  British  manufacturer,  and  its  ex- 
port as  a  manufactured  article. 

BURDENS   DPON    IMPORTS   AND   EXPORTS. 

Raw  Material — 

1.  Inland  carriage  to  the  sea. 

2.  Voyage  to  England. 

3.  Import  duty. 

4.  Inland  carriage  of  the  manufacturer. 
Manufactured  Article — 

5.  Inland  carriage  to  the  sea. 

6.  Voyage  to  foreign  country. 

7.  Import  duty. 

8.  Inland  carriage  to  the  customer. 

Here  are  eight  distinct  burdens  or  charges  increa.«ing  the  price  of  our 
manufactures  to  the  foreign  consumers.     Out  of  these — 

Four  are  inland  carriage, 

Two  are  navigation,  and  only 

Two  are  custom  house  duties. 

Now,  except  in  the  case  of  prohibitory  duties,  it  was  undoubtedly  the 
case  that,  before  the  introduction  of  railways,  inland  carriage  was  the 
most  expensive  of  these  burdens.  In  countries  unprovided  with  canals, 
a  very  few  miles  of  road  tran.sport  was  an  absolute  pn^hibition.  It  is  so 
in  many  parts  of  India,  Spain,  and  Turkey  at  the  present  day.  In  coun- 
tries provided  with  canals,  rates  were  high,  and  trausjDort  slow,  and  al- 
ways coming  to  a  dead   lock.     Hence  the  relief  afforded  by  railways. 


33 

both  in  cheapness  and  saving  of  time,  was  far  beyond  any  relief  by  free 
trade  in  taking  off  moderate  duties. 

In  a  vast  number  of  eases  railways  did  more  than  cheapen  trade,  they 
rendered  it  possible.  Railways  are  the  nearest  approach  that  human  in- 
genuity has  yet  devised  to  that  magic  carpet  of  the  "  Arabian  Nights," 
for  which  I  ventured  to  express  a  wish. 

For  all  these  reasons  I  maintain  that  we  ought  to  give  railways  their 
due  credit  and  praise,  as  the  chief  of  those  mighty  agents  which,  within 
the  last  thirty  years,  have  changed  the  face  of  civilization. 

XI. — Railways  and  National  Debts. 

In  one  important  point  the  nations  of  Latin  race  have  stolen  a  clear 
march  upon  the  nations  of  Teutonic  origin,  of  England,  Germany,  and 
the  United  States,  by  their  appreciation  and  adoption  for  railways  of  the 
principle  of  a  sinking  fund.  The  idea  owes  its  origin  to  the  semi-Latin, 
semi-Teutonic  intellect  of  Belgium.  When  the  Belgian  government,  in 
1834,  pi'ojected  a  system  of  State  railways,  to  be  constructed  with  money 
borrowed  by  the  State,  they  provided  for  the  extinction  of  the  loans  in 
fifty  years  by  an  annual  sinking  fund.  The  amount  borrowed  was  nearly 
£8,000,000  sterling,  and  the  whole  will  be  paid  off  in  1884,  after  which 
date  the  whole  profits  of  the  State  lines,  352  miles  in  length,  will  become 
part  of  the  revenue  of  the  nation.  But  so  good  an  investment  are  these 
lines  that  their  present  net  income  is  £525,000  a  year,  and  is  increasing 
at  a  rate  which  promises  in  1884  a  net  revenue  of  £960,000,  a  sum  which 
will  be  sufficient  to  pay  the  interest  on  the  whole  national  debt,  now 
£26,000,000.  Besides  this,  the  conceded  lines,  1,000  miles  tn  length, 
will  become  amortized  and  become  State  property  in  90  years  from  the 
beginning  of  their  concessions,  and  the  profits  on  a  capital  of  more  than 
£13,000,000  will  then  be  available  toward  the  State  revenue. 

This  system  was  copied  by  France,  and  imitated  from  her  by  the  other 
Latin  nations,  Spain,  Portugal,  and  Italy,  as  well  as  by  the  non-Latin 
States  of  Austria  and  Holland.  All  these  countries,  at  the  end  of  vari- 
ous terms  of  99,  90,  and  85  years  will  practically  pay  off  a  large  portion 
of  their  national  debt.  Improvident  Spain  will  pay  off  about  £40,000,000 
out  of  her  debt  of  £164,000,000.  Heavily  burdened  Austria  will 
practically  abrogate  something  like  £65,000,000  out  of  her  debt  of 
£250,000,000.  Italy  will  wipe  out  a  large  portion  of  her  debt  of 
£176,000,000. 

But  the  most  remarkable  example  is  France ;  and  I  will  endeavor  to 
explain  as  briefly  as  possible  the  working  of  the  French  system.  In 
France  the  railways  are  conceded  for  99  years,  but  it  is  one  of  the  con- 
ditions of  the  grant  that  all  the  capital,  whether  in  shares  or  debentures, 
shall  be  paid  off  within  that  term  by  an  annual  amortissement,  or  sinking 
fund.  The  small  amount  of  this  annual  payment  is  very  extraordinary. 
The  French  rate  of  interest  is  5  per  cent.,  and  the  annual  sinking  fund 
necessary  to  pay  off  100  francs  in  99  years  is  as  nearly  as  possible  .04. 
Put  into  the  English  form,  for  the  sake  of  clearness,  this  means  that  the 
annual  sinking  fund  necessary  at  5  per  cent;  to  redeem  £100  in  99  years 
is  only  Is.  per  annum.  As  debentures  are  issued  in  France  for  less  than 
99  years  when  part  of  the  concession  is  run  out,  the  amount  of  the  sink- 
ing fund  varies,  but  it  is  usually  said  to  amount  on  the  average  to  one- 

3 


34 

eighth  per  cent.  As  the  whole  expended  capital  of  French  railways 
represented  by  shares  and  debentures,  is  £233,000,000,  it  follows  that 
the  total  annual  sinking  fund  paid  by  the  French  companies  for  the  re- 
demption of  that  sum  i?*  le?s  thon  £300,000.  The  result  is  marvellous, 
that  tor  £300,000  the  French  nation  will  acquire,  in  less  than  99  years, 
an  unencumbered  property  of  £233,000,000  sterling.  But  this  is  not 
all.  The  railways  represented  by  that  £233,000,000  sterling  produced 
in  1865  a  net  revenue  of  ubout  £12,500,000.  Before  1872  further  rail- 
ways will  have  been  completed,  which  will  be  amortized  at  the  same  rate 
as  their  parent  lines,  and  will  produce  before  many  years  a  net  income  .of 
£4,000,000,  making  a  total  net  income  of  the  French  railways  £16,500,000. 
But  the  total  charge  of  the  French  national  debt  in  1865  was  only 
£16,000,000.  /S'o  that  France  has  now  a  system  in  operation  which,  in 
less  than  90  years  from  the  preseiit  time,  will  relieve  the  country  from  the 
ivhole  burden  of  her  national  debt  of  nearly  £500,000,000. 

Is  it  allowable  in  me  to  ask,  why  are  we  doing  nothing  of  the  sort  ? 
When  so  many  other  nations  are  paying  ofi'  by  means  of  their  railways 
a  portion,  or  the  whole  of  their  national  debts,  why  are  AA"e,  with  all  our 
wealth  and  resources,  to  do  nothing  ?  A  scheme  of  amortization  suited 
to  the  habits  of  the  English  people,  is  perfectly  possible,  and  the  peculiar 
position  of  railway  companies  at  the  present  moment  renders  it  easy  to 
carry  out.  I  will  say  nothing  about  debentures,  because  a  plan  is  now 
before  the  government  dealing  with  them.  But,  I  say,  respecting  Share 
Capital,  that  it  would  be  perfectly  practicable  for  the  State  to  become 
the  possessor  of  a  large  proportion  of  this  stock  in  a  comparatively  short 
time,  and  at  no  great  expense.  An  annual  sinking  fund  of  5s,  per  cent, 
will  pay  off  £100  in  seventy-two  years,  reckoning  only  4  per  cent,  in- 
terest. Hence,  in  seventy-two  years,  an  annual  sinking  fund  of  £500,- 
000  a  year  will  pay  ofi'  £200,000,000.  The  government  duty  on  railways 
amounts  to  £450,000  a  year,  and  will  soon  reach  £500,000.  My  propo- 
sal would  be  to  make  this  a  sinking  fund  towards  purchasing  £200,000,- 
000  of  preference  and  other  stock,  and  let  it  be  invested  annually  by  the 
Board  of  Trade,  or  by  commissioners  appointed  for  the  purpose,  like 
those  appointed  for  the  national  debt.  Instead  of  canceling  each  share 
as  it  is  purchased,  let  it  be  held  in  trust  for  the  nation,  and  the  divi- 
dends applied  every  year  in  augmentation  of  the  sinking  fund.  In  this 
manner,  at  the  end  of  about  seventy-two  years,  £200,000,000  of  prefer- 
ence and  ordinary  share  capital  would  become  the  property  of  the  na- 
tion, and  its  dividends  become  applicable  to  the  interest  of  the  national 
debt.  As  railway  dividends  average  4  to  44  per  cent.,  the  devidends  on 
the  redeemed  capital  would  pay  the  interest  on  more  than  £250,000,000 
consols,  and  be  equivalent  to  the  redemption  of  that  amount  of  our  na- 
tional debt. 

I  believe  that  this  is  a  practical  scheme.  In  a  slightly  difierent 
form  it  is  now  being  carried  out  in  France,  Belgium  and  other  continen- 
tal States.  I  trust  that  before  long  we  shall  cease  to  be  almost  the  only 
nation  in  Europe  which  does  net  act  on  the  principle  "that  raihvays  are 
the  true  sinking  fund  for  the  payment  of  the  national  debt." 

The  advantages  of  such  a  sinking  fund  invested  in  consols  are  three- 
fold: 

1.  It  would  be  invested  annually  in  railway  capital  at  a  higher  inte- 
rest, and  thus  accumulate  more  rapidly. 


35 

2.  It  Tvould  have  a  different  primary  object,  viz :  tlie  purchase  of  a 
State  interest  in  railways,  and  would,  therefore,  be  more  likely  to  enlist 
popular  feeling  in  favor  of  its  maintenance. 

3.  It  would  be  distinct  and  separate  from  the  national  debt,  and  not 
under  the  same  control,  and  would,  therefore,  be  less  liable  to  be  diverted 
to  the  financial  necessities  of  the  hour. 

Perhaps  it  will  be  said  that  a  railway  sinking  fund  is  unsuited  to  the 
character  and  habits  of  the  English  people.  But  surely  it  is  our  charac- 
ter to  be  prudent  and  to  pay  off  encumbrances,  and  to  adopt  the  best 
means  of  accomplishing  that  object.  Surely  it  is  not  right  in  a  great  and 
wealthy  and  enlightened  nation  like  England  to  incur  the  reproach  of 
being  spendthrift  of  her  resources  and  reckless  of  her  debts. 

XII. — Further  Railway  Extension. 

England  is  undoubtedly  the  country  in  the  world  best  provided  with 
railways.     The  statistical  comparison  stood  thus  at  the  end  of  1865 : — 

RAILWAYS   COMPARED    WITH   AREA   AND   POPULATION. 

Railway  Miles    Square  Miles  Population  per 

Country.  Open.         per  Kailway  Mile.     Railway  Mile. 

England  and  Wale.« 9,251  6^  2,186 

1.  Belgium 1,350  8  3,625 

2.  United  Kingdom 13,289  9  2,206 

3.  Switzerland 778  19  3,257 

4.  Prussia  and  Germany  (except 

Austria) 8,589  20  3,525 

5.  Northern  United  States  (except 

Kansas,  Nebraska  and  Oregon) 24,883  25  801 

6.  France 8,134  26  4,607 

7.  Holland 372  29  9,066 

8.  Italy 2,389  41  9,084 

9.  Austria , 3,735  63  9,375 

10.  Spain 2,721  67  5,991 

11.  Portugal 419  87  8,555 

12.  Southern  United  States 10,300  92  1,025 

13.  Canada 2,539  136  987 

14.  India 3,186  287  42,572 

Total  of  the  14  countries 82,495  '  

But  England  has  a  much  greater  proportion  of  double  lines,  and  a 
larger  number  of  trains  on  each  line;  Avhile,  on  the  other  hand,  Belgium 
and  other  continental  nations  have  lower  fares  and  give  greater  accom- 
modation to  third  and  fourth  class  passengers.  Both  parties  have  some- 
thing to  learn — they  to  admit  the  principle  of  competition  and  increase 
the  number  of  railways ;  we  to  provide  cheap  conveyance  for  the  masses, 
without  the  clumsy  device  of  excursion  trains. 

But  now  comes  the  question — do  England  and  Belgium  need  further 
railways,  or  are  they  already  sufficiently  provided?  It  may  partly  be 
answered  by  the  fact  that  in  England  there  are  about  3,500  miles  au- 
thorized by  Parliament  which  have  not  yet  been  made,  and  that  in  Bel- 
gium there  are  450  miles  (equal  to  4,500  in  England)  conceded  but  not 
constructed.  And  we  may  also  point  to  the  circumstance  that  in  Eng- 
land and  Wales  there  were,  in  1865,  6,081  miles  of  double  line  against 
3,170  miles  of  single,  showing  that  there  is  a  want  of  cheap  lines  through 


36 

rural  districts.  A  glance  at  the  railway  map  will  confirm  this  inference. 
The  lines  run  in  the  direction  of  the  metropolis  or  some  great  town,  and 
there  are  few  cross-country  lines.  The  distance  between  the  lines  sup- 
ports this  conclusion.  Deducting  the  manufacturing  districts,  which  are 
crowded  with  a  railway  network,  the  remainder  of  the  country  gives  an 
average  of  about  fifteen  miles  between  each  mile  of  railway.  The  aver- 
age ought  not  to  be  more  than  eight  or  ten  miles. 

The  advantage  of  a  railway  to  agriculture  may  be  estimated  by  the 
following  facts.  A  new  line  would,  on  an  average,  give  fresh  accommo- 
dation to  three  and  a-half  miles  on  each  side,  being  a  total  of  seven 
square  miles,  or  4,560  acres  for  each  mile  of  railway.  It  would  be  a 
very  moderate  estimate  to  suppose  that  cartage  would  be  saved  on  one 
ton  of  produce,  manure,  or  other  articles  for  each  acre,  and  that  the 
saving  per  ton  would  be  five  miles  at  8d.  per  mile.  Hence  the  total  an- 
nual saving  would  be  £768  per  mile  of  railway,  which  is  5  per  cent,  in- 
terest on  £15,000.  Thus  it  is  almost  impossible  to  construct  a  railway 
through  a  new  district  of  fair  agricultural  capabilities  without  saving 
to  the  landowner  and  farmer  alone  the  whole  cost  of  the  line. 
Besides  this,  there  is  the  benefit  to  the  laborers  of  cheap  coals  and  better 
access  to  the  market.  There  is  also  the  benefit  to  the  small  towns  of 
being  put  into  railway  communication  with  larger  towns  and  wholesale 
producers.  And  there  is  the  possibility  of  opening  up  sources  of  mine- 
ral wealth. 

Somebody  ought  to  make  these  agricultural  lines,  even  though  they 
may  not  pay  a  dividend  to  the  shareholder.  But  who  is  that  somebody 
to  be  ?  The  great  companies  will  not  take  the  main  burden  lest  they 
should  lower  their  own  dividends.  The  general  public  will  not  subscribe, 
for  they  know  the  uncertainty  of  the  investment  turning  out  profitable. 
And  notwithstanding  the  able  letters  signed  "  H  "  in  the  Times  some 
months  ago,  I  cannot  advocate  the  necessarily  wasteful  system  of  con- 
tractors' lines,  or  believe  in  the  principle,  "  Never  mind  who  is  the  loser 
so  that  the  public  is  benefited."  Railway  extension  is  not  promoted  in 
the  long  run  by  wasteful  financing  and  ruinous  projects.  On  the  con- 
trary, such  lines  injure  railway  extension  by  making  railways  a  bye-word 
and  depreciating  railway  property,  and  they  render  it  impossible  to"  find 
supporters  for  sound  and  beneficial  schemes. 

The  proper  parties  to  pay  for  country  lines  are  the  proprietors  and  in- 
habitants of  the  districts  through  which  they  pass.  They  are  benefited 
even  if  the  line  does  not  pay  a  dividend.  They  have  every  motive  for 
economical  construction  and  management,  and  can  make  a  line  pay  where 
no  one  else  can.  But  they  will  not  subscribe  any  large  portion  of  the 
capital  as  individuals.  Very  few  will  make  a  poor  investment  of  any 
magnitude  for  the  public  good,  though  all  might  be  ready  to  take  their 
part  in  a  general  rate.  Almost  every  country  but  our  own  has  recognized 
the  fact,  and  legislated  on  this  basis,  by  empowering  the  inhabitants  of  a 
district  which  would  be  benefited  to  tax  themselves  for  the  construction 
of  a  railway.  I  have  shown  that  in  France  either  the  department  or  the 
commune  may  vote  a  subvention  out  of  their  public  funds,  and  that  in 
the  United  States  the  municipalities  vote  subsidies  of  municipal  bonds. 
In  Spain  the  provinces  and  the  municipalities  have  the  power  to  take 
shares  or  debentures,  or,  if  they  prefer  it,  to  vote  subventions  or  a  guar- 
antee of  interest.     In  Italy  the  municipalities  do  the  same  thing.     Why 


37 

should  not  England  follow  their  example,  and  authorize  the  inhabitants 
of  parishes  and  boroughs  to  rate  themselves  for  a  railway  which  will  im- 
prove their  property,  or  empower  them  to  raise  loans  on  the  security  of 
the  rates,  to  be  paid  off  in  a  certain  number  of  years  by  a  sinking  fund, 
as  is  done  for  sanitary  improvements?  I  see  no  other  way  of  raising  the 
nucleus  of  funds  for  carrying  out  many  rural  lines  which  would  be  most 
beneficial  to  the  country. 

I  can  give  a  remarkable  instance  of  the  benefits  caused  by  an  unre- 
munerative  railway.  In  1834  the  inhabitants  of  Whitby  projected  a  line 
from  Whitby  along  the  valley  of  the  Esk  to  Pickering,  half  way  to  York. 
The  line  was  engineered  by  George  Stephenson,  and  was  originally  worked 
by  horse-power  and  carriages  on  the  model  of  the  four-horse  coaches. 
But  though  considered  at  that  time  one  of  the  wonders  of  the  world,  the 
line  was  utterly  unprofitable,  and  the  Whitby  people  looked  upou  it  as  a 
bad  speculation,  much  as  the  shareholders  of  the  London,  Chatham,  and 
Dover  look  on  their  present  property.  The  railway  was  ultimately  sold 
to  the  Northeastern  Company  ;  but  though  the  shareholders  got  no  ad- 
vantage, somebody  else  did.  Farmers  and  laborers  came  to  market  in 
AVhitby,  and  got  coals  and  other  necessaries  at  reduced  rates,  while  they 
sold  their  produce  better.  Very  soon  rents  began  to  rise,  and  I  find  the 
total  rise  since  the  construction  of  the  railway  has  been  from  an  average 
of  15s.  per  acre  up  to  22s.,  or  nearly  50  per  cent.  But  far  greater  con- 
sequences resulted.  The  cliffs  at  Whitby  were  known  to  contain  nodules 
of  ironstone,  which  were  picked  up  and  sent  to  ironworks  on  the  Tyne. 
Soon  after  the  opening  of  the  railways  George  Stephenson  and  a  number 
of  Whitby  gentlemen  formed  a  company,  called  the  Whitby  Stone  Com- 
pany, for  working  stone  quarries  and  ironstone  mines  at  Grosmont,  about 
six  miles  up  the  railway.  At  first  the  ironstone  was  very  badly  received 
by  the  iron  founders,  and  it  was  only  after  long  and  patient  perseverance 
that  the  company  got  a  sale  for  what  they  raised.  It  was  not  till  1844 
and  1846  that  the  merits  of  the  Cleveland  ironstone  were  fully  acknow- 
ledged and  large  contracts  entered  into  for  its  working  throughout  the 
district.  Thus  the  unprofitable  Whitby  and  Pickering  railway  opened 
up  the  Cleveland  iron  district  and  caused  the  establishment  of  a  very 
large  number  of  foundries  and  the  employment  of  thousands  of  work- 
men, and  has  added  very  materially  to  the  wealth  of  England. 

XIII. — Conclusion. 

From  the  facts  which  have  been  brought  forward  I  draw  the  following 
conclusions  : 

1.  Railways  have  been  a  most  powerful  agent  in  the  progress  of  com- 
merce, in  improving  the  condition  of  the  working  classes,  and  in  develop- 
ing the  agricultural  and  mineral  resources  of  the  country. 

2.  England  has  a  more  complete  and  efficient  system  of  railways  than 
any  other  country,  but  is  not  so  far  ahead  that  she  can  aflbrd  to  relax  her 
railway  progress,  and  to  let  her  competitors  pass  her  in  the  race. 

3.  England  ought  to  improve  the  internal  organization  of  her  i-ail  ways, 
both  as  to  finance  and  traffic,  and  to  constitute  some  central  authority 
with  power  to  investigate  and  regulate. 

4.  A  sinking  fund  should  be  instituted  to  purchase  for  the  State  a  portion 
of  the  railway  capital,  and  so  to  lighten  the  charge  of  the  national  debt. 


38 

5.  Power  should  be  given  to  parishes  and  boroughs  to  rate  themselves 
in  aid  of  local  railways  in  order  to  facilitate  the  construction  of  country 
lines. 

6.  England,  as  a  manufacturing  and  commercial  country,  is  benefited 
by  every  extension  of  the  railway  system  in  loreign  countries,  since  every 
new  line  opens  up  fresh  markets  and  diminishes  the  cost  of  ti'ansporting 
her  manufactures. 

I  cannot  conclude  without  saying  a  word  on  the  future  of  railways. 
The  progress  of  the  last  thirty-six  years  has  been  wonderful,  since  that 
period  has  witnessed  the  construction  of  about  85,000  miles  of  railway. 
The  next  thirty-six  years  are  likely  to  witness  a  still  greater  development 
and  the  construction  of  far  more  than  85,000  miles.  We  may  look  for- 
ward to  England  possessing,  at  no  distant  date,  more  that  20,000  miles, 
France  an  equal  number,  and  the  other  nations  of  the  continent  increasing 
their  mileage  until  it  will  bear  the  proportion  of  1  railway  mile  to  every 
10  square  miles  of  area,  instead  of  the  very  much  less  satisfactory  propor- 
tions stated  in  the  comparative  table.  We  ma)'^  expect  the  period  when 
the  immense  continent  of  North  America  will  boast  of  100,000  miles  of 
line,  clustered  in  the  thickly-populated  Eastern  States  and  spreading  plen- 
tifully through  the  Western  to  the  base  of  the  Rocky  Mountains  and  over 
to  California  and  the  Pacific.  We  may  anticipate  the  time  when  Russia 
will  bend  her  energies  to  consolidating  her  vast  empire  by  an  equally  vast 
railway  network.  We  may  predict  the  day  when  a  continuous  railroad 
will  run  from  Dover  to  the  Bosphorus,  from  the  Bosphorus  down  the  Eu- 
phrates, across  Persia  and  Beloochistan  to  India,  and  from  India  to  China. 
We  may  look  for  the  age  when  China,  with  her  350,000,000  of  inhabit- 
ants, will  turn  her  intelligence  and  industry  to  railroad  communication. 

But  who  shall  estimate  the  consequences  that  will  follow,  the  prodigious 
increase  of  commerce,  the  activity  of  national  intercourse,  the  spread  of 
civilization,  and  that  advance  of  hum.an  intelligence  foretold  thousands  of 
years  ago  by  the  prophet  upon  the  lonely  plains  of  Palestine,  "when 
many  shall  run  to  and  fro  upon  the  earth,  and  knowledge  shall  be  in- 
creased ?  " 


Four  hundred  and  forty  million  dollars  of  subsidy  granted 
BY  THE  British  Government  to  build  Railways  into  the  Cotton 
Districts  of  India. 


The  eflPorts  recently  made  by  the  English  government  to  develop  the 
resources  of  its  vast  empire  in  Hindostan,  evince  remarkable  energy  and 
sagacity.  Probably  no  country  in  the  world  has  made  more  material 
progress  within  the  last  few  years  than  British  India.  Notwithstanding 
the  discouragements  arising  from  the  mutiny  of  the  Sepoys,  and  the 
disasters  of  famine  and  financial  collapse,  the  present  condition  and  future 
prospects  of  the  people  have  been  greatly  improved.  Railroads  have 
been  built,  highways  have  been  thrown  up,  canals  widened  and  deepened, 
obstructions  removed  from  rivers,  bridges  constructed  over  rivers  and 
mountain  chasms,  and  the  jungle  has  been  rendered  passable  for  the  first 
time. 


39 

These  great  changes  in  the  conJitiou  of  the  interior  of  British  India 
were  initiated,  or,  at  least,  actively  commenced  in  accordance  with  a 
policy  adopted  at  the  commencement  of  our  civil  war.  England,  in 
place  of  attempting  to  break  up  our  monopoly  of  the  cotton  trade  by  an 
open  and  formal  assistance  of  the  South,  resolved  to  effect  the  same 
object  by  other  and  surer  means.  Her  statesmen,  with  far  reaching 
sagacity,  resolved  to  improve  the  opportunity  aflurded  by  the  American 
crisis,  so  as  to  attach  the  tottering  Indian  Empire  to  the  imperial  govern- 
ment by  a  bridge  of  gold. 

In  1860-61,  the  Marquis  Dalhousie,  Governor  General,  inaugurated 
the  extensive  system  of  internal  improvement,  which  was  to  enable  the 
people  of  Hindostan  to  compete  with  America  for  the  cotton  trade  of 
the  world.  The  most  favorable  cotton  regions  of  India  were  inaccessible 
for  want  of  proper  facilities  for  communi-cation.  In  order  to  get  the 
staple  to  a  market,  it  was  necessary  to  carry  it  by  man  and  horse  power 
over  vast  tracts  of  jungle,  across  mountains  and  ravines,  and  ferry  it 
over  great  rivers. 

To  obviate  these  difficulties,  the  railroad  movement  inaugurated  was 
of  the  most  comprehensive  character.  The  population  of  India  subject 
to  the  English  government  is  probably  not  less  than  two  hundred  millions. 
The  country  comprises  an  area  of  1,364,000  square  miles,  stretching  1,800 
miles  in  length  and  1,500  miles  in  breadth  from  east  to  west.  This  great 
country  is  broken  up  into  an  almost  endless  geographical  diversity.  There 
are  vast  and  impassable  jungles,  huge  forests,  mighty  rivers,  mountain 
chains  and  extensive  plains,  the  whole  being  combined  with  a  wonderful 
luxuriance  of  vegetation,  which  at  every  step  obstructs  progress  and 
almost  prevents  any  passage  by  man  or  beast. 

It  was  over  this  country,  presenting  so  many  difficulties,  that  Lord 
Dalhousie  contemplated  his  admirable  network  of  railroads.  The  system 
was,  of  course,  planned  Avith  reference  to  the  geographical  features  of 
the  country,  so  as  to  connect  the  extremes  of  the  vast  empire  with  grand 
trunk  lines,  from  which  branch  lines,  or  feeders,  might  be  constructed, 
according  to  the  future  reqviirements  of  local  commerce.  Four  thousand 
six  hundred  miles  of  railroad  were  to  be  built,  at  an  estimated  expense 
of  $440,000,000.  The  credit  of  the  imperial  government  was  granted 
to  private  companies,  guaranteeing  a  certain  amount  of  interest  on  all 
money  invested  in  Indian  railroads.  The  government  wisely  left  all  de- 
tails of  construction  and  management  to  the  energies  of  the  companies 
themselves,  which  had  every  motive  for  economy,  as  all  money  earned 
above  the  guaranteed  dividends  was  clear  gain.  The  system  worked  so 
well,  that  last  year  several  Indian  railways  exceeded  the  5  per  cent, 
guaranteed  interest.  During  the  half  year  ending  December  31st,  the 
East  Indian  and  the  Great  Peninsular  railroad  companies  were  able  to 
declare  surplus  dividends.  Half  the  amount  of  surplus  income  was  de- 
voted to  the  repayment  of  former  advances  for  interest  by  the  govern- 
ment, and  the  other  half  was  divided  among  the  stockholders. 

The  net  amount  of  guaranteed  interest  paid  hy  the  government  diminishes 
every  year.  In  1865  the  amount  was  £1,450,000 ;  in  1866  it  was 
£800,000,  and  this  year  only  £600,000  was  required.  These  figures 
indicate  the  profitable  character  of  these  Indian  railroad  enterprises. 

The  original  system  of  Indian  railroads  contemplated  the  establishment 
of  communications  between  Bombay,  Madras,  and  Calcutta,  the  three 


40 

great  centres  of  military  and  commercial  power.  The  extremes  of  the 
empire  were  united,  and  roads  were  cut  through  the  great  agricultural 
and  producing  districts.  The  East  Indian  Railroad  Company  has  now 
under  its  management  1,310  miles  of  railway,  constructed  at  an  expense 
of  $100,000,000,  and  is  the  longest  line  of  road  in  the  world  under  one 
company.  The  Great  Indian  Peninsular  road  will  be  1,233  miles  long 
wheu  completed,  and  next  year  it  will  be  open  for  traffic  along  its  entire 
length.  In  1868,  from  Calcutta  to  Bombay,  a  distance  of  1,458  miles, 
there  will  be  an  unbroken  railroad  communication.  The  branch  lines 
connecting  with  the  main  stems  are  of  great  extent,  and  will  cost  as  much 
money  as  the  main  roads.  To  show  the  progress  of  Indian  railroads  it 
may  be  stated  that  it  is  only  fourteen  years  since  the  first  line  was  opened 
in  that  country.  At  the  present  time  there  are  3,200  miles  in  operation, 
and  next  year  a  thousand  additional  miles  will  be  completed. 

This  development  of  railroads  in  British  India  is  of  the  highest  im- 
portance as  affecting  the  cotton  trade.  Formerly  we  enjoyed  a  monopoly 
of  the  market;  now,  nearly  one-half  of  the  cotton  manulactured  in  Eng- 
land is  derived  from  India  alone.  A  late  Liverpool  circular  estimates 
the  quantity  of  American  cotton  now  on  hand  and  to  arrive  before  De- 
cember 31st,  1867,  at  680,000  bales,  while  the  supply  of  India  cotton  for 
the  same  period  is  estimated  at  925,000  bales.  Without  expressing  any 
opinion  as  to  the  correctness  of  these  figures,  the  more  important  fact 
for  us  to  remember  is  that  the  manufacturers  of  England  have  so  altered 
and  improved  their  machinery  as  to  be  able  to  use  in  much  larger  pro- 
portion than  formerly  the  shorter  India  staple,  while,  at  the  same  time, 
the  quality  of  cotton  from  that  country  has  been  decidedly  and  steadily 
improved,  and  is  being  more  carefully  prepared  for  market.  Judging 
then  of  the  future  from  the  past,  it  may  be  expected  to  equal  the  Amer- 
ican article  at  no  distant  period. 

The  establishment  of  railroads  in  India  removes  the  chief  obstacles  to 
the  growth  of  an  almost  unlimited  supply  of  cotton.  The  country  is 
admirably  adapted  for  it,  and  the  teeming  population  has  long  been  fa- 
miliar with  the  staple,  and  exhibit  great  aptitude  in  its  culture.  The 
best  cotton  regions  have  not  yet  been  opened  to  the  world ;  the  only  fa- 
cilties  for  reaching  a  market  being  the  slow  and  expensive  process  of  cattle 
teams.  The  new  railroads,  however,  will  convey  the  products  bt  these 
regions  to  market  cheaply  and  expeditiously.  And  it  is  a  noticeable 
feature  of  Indian  railroad  companies  that  their  revenues  are  derived  from 
goods  rather  than  from  passengers.  Of  $35,000,000  income  of  Indian 
railroads  during  the  three  years  ending  June,  1866,  two-thirds  were  re- 
ceived from  merchandise  traffic. 


J.  L.  Pearson,  Peinter,  Cor.  9th  &  D  sts. 


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uNivERsrrv  of  Illinois  urbana 


